China’s PET market sees a fresh round of cost-driven hikes
Aug. 27, 2018
In China, the PET market retained its firming trend last week on the back of surging PTA prices in Asia. Sellers reported that market activity slightly picked up despite the approaching end of the high season.
Overall export PET prices were quoted at $1280-1330/ton FOB China, cash. The range increased $40/ton on the low end and $20/ton on the high end when compared to the previous week. A source from a local producer reported that they lifted their export PET offer by $40/ton from a week earlier to $1330/ton FOB, cash. He commented, “PTA prices have increased notably while some sellers have started to sell in limited quantities. Buyers are still cautious given the approaching low season, yet we have received more inquiries recently.” Another Chinese producer also applied a $20/ton increase on its export PET offer, noting, “Despite the approaching end of the high season, the PET market has received support from the upstream side. PTA futures are rising due to limited supplies.”
Inside China, the overall range for local PET prices also witnessed further gains of around $20-25/ton on a week over week basis. A domestic producer lifted its local offers by CNY200/ton ($29/ton) from the previous week. “The low season is about to start, however firming upstream costs, particularly for PTA and PX, continue to push the PET market higher. The depreciation of the yuan against the US dollar also causes increases in local prices.”
A South Korean PET producer, meanwhile, kept its export offers stable from the previous week at $1330/ton FOB Busan, cash.
PET players are now closely monitoring the upstream movements as they believe that the market can sustain a firming trend so long as PTA prices move higher. Still, buyers are expected to remain cautious about their purchasing activity given the upcoming low season. In feedstock markets, spot PTA prices increased further by $45-50/ton on a weekly basis to reach $960/ton CFR China while spot MEG prices were mostly stable at $905-910/ton with the same terms.