Upstream keeps China PET afloat; prices hit 11-month high
“PET offers increased due to higher crude and also raw material prices. Cost support is there and so, sellers took the opportunity to increase their offers,” a source at a domestic producer explained.
Oil futures have moved above $50/bbl recently with producers agreeing to broadly keeping output steady which also involved Saudi Arabia making a production cut. WTI futures settled at $53.21/bbl on Tuesday while Brent crude oil closed at $56.58/bbl.
Meanwhile, PTA and MEG have also provided feedstock cost support. Spot PTA prices have moved up from $505/ton to $543/ton from last week while MEG has increased from $570/ton to $587/ton - both on CFR China basis.
PET bottle prices gained 17-18% in 10 weeks
ChemOrbis Price Index data suggest that the weekly averages of PET bottle prices on FOB/ex-warehouse China basis have gained 17-18% since the uptrend kicked off 10 weeks ago.
For the current week, prices were assessed at $755-780/ton FOB China, cash and at CNY5600-5700/ton ($766-780/ton without VAT) ex-warehouse, cash including VAT.
Demand remains steady
Demand has remained somewhat stable although requirements usually tend to get more subdued when the climate gets cooler. Demand is strongest in summer when hot weather drives demand for soft drinks packaged in PET bottles.
“Chinese demand has been steady with domestic prices edging higher. Global demand across the Middle East, Europe, North America and Africa has also improved from 2020,” a local trader said.
The steady demand has also prompted producers to increase production rates, with a number of them currently running their plants at 95%.
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