PET prices buck the downward trend in Asian plastic markets

Yesterday we reported that prices for most commodity resins have fallen steadily across Asia for the past four weeks, but one material is bucking the tend: polyethylene terephhalate. Spot PET prices in Asia have posted four consecutive weeks of rising prices, according to plastics pricing service ChemOrbis.

ChemOrbis says its sources attribute the steady rise in PET prices to firmer feedstock costs and the resultant margin pressure on PET suppliers. Healthy PET demand in China during the summer season, when more beverages are sold and consumed than in winter months, was cited as another factor aiding the recent firmness in PET prices, although sources added that buying interest for PET has weakened recently now that the summer season is coming to an end.
 
Spot PTA and MEG prices on a CFR China basis have posted cumulative increases of around $60-65/ton during the past month, pushing up the theoretical costs of PET production by $75/ton.

Export PET prices crept up by $30-40/ton on an FOB China basis last week while domestic PET prices climbed CNY200-400/ton ($31-63/ton), as per ChemOrbis. Compared to prices in August, export PET prices have increased by $90/ton while domestic prices have risen by CNY800/ton ($125/ton). Sellers are generally taking a firm stance on their prices as rising feedstock costs have left producers with limited margins even after their most recent price increases.

Traders with whom ChemOrbis has had contact report that PET prices were largely stable at the beginning of this week as some market participants have begun to speculate that prices will stabilize soon now that spot PTA and MEG feedstock costs have begun to drop from their mid-September highs.

Most believe that the medium-term outlook for the PET market remains firm as most players believe that the recent down turns in spot PTA and MEG prices will be only temporary; PTA demand from the textile sector is said to be healthy and firm PX prices are also giving support to the PTA market.