PET prices hit multi-month lows in Asia and Europe
China almost at its lowest since early 2019
According to ChemOrbis Price Wizard, the weekly average of export prices in China shifted down after hitting a five month-high in early April and the market has been retreating since then. China’s domestic PET market has also been following a downtrend since early April. The current levels for both export and local markets indicate the lowest levels since mid-January.
SEA market hits 5-month low
The Southeast Asia’s import PET markets also followed suit, currently standing at almost a five-month low.
Lower upstream costs drag prices down
The start of the downtrend is mostly correlated with weaker upstream costs. ChemOrbis Price Wizard shows that spot PX prices in Asia shed around 20% since March, taking cues from the softening crude oil prices. Spot MEG prices also continued to descend as the bearish sentiment persisted in the market.
Resurgence of trade war exacerbates bearish sentiment
The bearish market sentiment in Asia was aggravated by the reversal of the previous positive progress made during the US-China trade talks. The new tariffs on $200 billion Chinese products came into effect on May 10 and China retaliated by placing its own tariffs on $60 billion US goods on May 13.
Limited demand from export outlets, particularly in Europe, has also been cited as a contributing factor.
Europe’s PET market at lowest since January 2018
In Northwestern Europe, PET markets have remained bearish despite the traditionally high season and hit their lowest levels since January 2018, the weekly average data obtained from ChemOrbis Price Index showed. Similar scene was seen in Italy’s local PET market, where disappointing demand dented the sentiment.
Demand tapers off on cold weather across Europe
The seasonal pick-up in the beverage sector activities has been delayed due to bad weather in the region. In addition to the cold weather conditions and frequent rains, high inventories and weak monomer prices have also led to softer pricing.
Spot PX slides 20% in 2 months
Similar to monomer movement in Asia, spot PX prices on an FOB NWE basis have lost more than 20% of its value since March this year, data from ChemOrbis Price Wizard suggests.
Gap between virgin and recycled PET narrows in Italy
Meanwhile, several buyers in Italy were heard to be switching from R-PET back to virgin PET as the gap between the two markets has narrowed significantly amid lower prices.
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