Players in China and Southeast Asia report that they are holding a firmer outlook on the PET market for the coming weeks as upstream costs rallied at the end of last week while buying interest from Southeast Asia is expected to pick up in September after the Ramadan holidays, as per the pricing service of ChemOrbis.
Spot naphtha prices on a CFR Japan basis jumped around $20/ton over the past week to reach their highest levels since early May. Spot MEG prices on a CFR China basis rose nearly $30/ton at the end of last week following news that a MEG shutdown at Kuwait’s Equate would be prolonged. Spot prices for PX and PTA on a CFR NEA basis also moved up around $10/ton over the past week. Inside China, a source at a PET producer reported that Sinopec has settled its August PET feedstock contracts with increases of CNY400-800/ton ($63-126/ton) from July.
Several converters in Southeast Asia moved to replenish their stocks last week in anticipation of higher prices in the coming weeks. “We purchased 200 tons of South Korean PET last week as our stock levels were running low and demand for our end products has begun to pick up,” a Vietnamese converter manufacturing plastic containers told ChemOrbis. “We believe that PET prices will track a stable to firmer trend in the coming weeks in accordance with firmer upstream costs,” the buyer added.
A Thai converter manufacturing food packaging products stated, “We purchased some Vietnamese PET from the import market last week as we found the prices for this material to be more competitive than the prevailing local price levels. We are seeing good demand for our end products these days.” A source at Chinese PET producer exporting to Southeast Asia commented, “Trading activity was limited last week because of the holidays, but we are still holding a bullish outlook on the region’s PET market.”
Players in China are also expecting to see firmer prices in the coming weeks, with many Chinese PET producers complaining that they need to achieve some price increases in order to restore acceptable operating margins. “We left our prices unchanged last week but we expect to see higher prices in the days ahead given the recent upward movement in feedstock costs,” a source at a Chinese producer told ChemOrbis.
A Chinese converter manufacturing PET bottles for the beverage sector commented, “We are planning to make some purchases for September soon as we believe that PET prices will gain some ground in the weeks ahead.” A distributor based in Nanjing stated, “Domestic PET prices were stable over the past week but we believe that prices will move higher in the days ahead due to stronger upstream costs.”
