Southeast Asia PET markets move sideways during China’s absence
A source at a large South Korean producer said “We have maintained PET resin offers this week amid stable feedstock PTA and MEG prices. China participants are out for the Golden Week holiday and so, the markets are quiet. Regional demand has remained weak. We are more focused on our contract customers who are able to support the high PET resin levels.”
Import prices for PET in Southeast Asia this week are being maintained at around the $682/ton level on CIF SEA basis, according to the weekly average data from ChemOrbis Price Index.
A relative lack of volatility among feedstock price levels has also provided a degree of support for PET markets.
PTA and MEG prices have hovered around $430/ton and $460/ton respectively on CFR China basis after facing some pressure from mid-September, ChemOrbis Price Wizard shows.
Pressure from inventory levels
Unlike China where hot weather during summer boosts demand for cold drinks packaged in PET bottles, the climate in Southeast Asia tends to be stable most of the year due to the tropical climate.
Demand has been driven more by economic factors in Southeast Asia.
A source at an Indonesian producer lamented “We have maintained offers for PET resin this week amid continuing weak domestic demand. We have inventory pressure and hence, the need to reduce domestic prices to reduce inventory. Domestic demand has continued to be tepid due to lackluster post COVID lockdown recovery.”
The economic recovery in Southeast Asia has been hampered by a second wave of COVID-19 infections which prompted renewed lockdowns in some cities.
Markets await China’s return from holidays
The large Chinese market often exerts a strong spillover influence on Southeast Asia. Market players lamented the lack of strong incentives to move the market due to the absence of Chinese participation amid the week-long holidays.
The holidays in China officially end on Thursday but several market players tend to take an extended break and return next week.
Market activity has also been affected by holidays in other countries in Northeast Asia. South Korea and Taiwan were closed for holidays late last week and again this Friday.
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