Lower costs keep PET sentiment weak across Asia
Export PET prices on FOB China basis retreated by around $145/ton on average during the last two months, according to ChemOrbis Price Wizard. A Chinese PET producer reported, “Demand continued to weaken since a lot of buyers moved to the sideline in anticipation of further price reductions. At the moment, we are only operating at around 70% capacity due to weak demand from both local and export markets.” Similarly, local PET prices in China plunged nearly $130/ton since mid May. “We did not receive much response from customers despite our cuts in our local offers given unstable upstream costs,” the producer added.
Source: ChemOrbis Price Wizard
A Shanghai based trader stated, “Dalian Futures are on a downtrend. Hence, mostly players are adopting a wait and see attitude which hinders trade. Buyers are not interested in replenishing inventories.” A Southeast Asian PET producer reported reduced demand from Indonesia blaming lower crude oil and feedstock prices. “We heard that a Chinese producer cut their operating rates to as low as 30% whereas we maintain our production levels,” the seller noted.
A trader in Thailand complained that although prices are down compared to last week, customers are still pushing for even lower PET offers which push done deals down. A converter in the country, meanwhile, argued, “The country is currently facing water supply issues due to the delayed rainy season which was supposed to start by end June. We hope it will arrive by August. Demand is performing normally for beverage bottles, while it has doubled for mineral water bottles.”
In upstream, spot PTA, MEG and PX prices have been down between $45-65/ton since the beginning of July in Asia. Lower feedstock prices are likely to continue to keep overall sentiment for downstream PET weak in the near term now that demand remains discouraging across the region.
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