PET sellers in China have begun the week by announcing significant increases on their offers for both the local market and the export market, pointing to rapidly rising feedstock costs, as per Chemorbis. Spot offers for major PET feedstocks jumped higher as the week began, tracking stronger ethylene and crude oil prices higher.
In the PX market, spot prices gained US$20/ton on the first trading day of the week to bring the total week over week increase figure on a CFR Far East Asia basis to US$45/ton. Following these latest price increases, spot PX offers are being quoted at the highest levels seen since the beginning of May. Traders attributed the rise in PX prices to firmer crude oil prices as well as bullish sentiment in the downstream PTA and polyester markets. Spot PTA prices also posted strong gains at the start of the week, gaining US$35-40/ton from the past week to follow PX in reaching price levels not seen since the beginning of May. Spot PTA prices were also buoyed by the prospect of strong downstream polyester demand, as textile manufacturers move to substitute polyester for cotton after reports of disappointing cotton harvests around the globe led to a sharp increase in cotton futures on the New York Mercantile Exchange. Spot MEG feedstock costs also began the week with strong gains, with spot quotes rising US$55-60/ton on the week on the strength of surging ethylene feedstock costs in Asia.
Taken together, the surge in upstream costs seen over the past week has translated into a US$51/ton increase in theoretical production costs for Asian PET producers, leaving most producers in Asia operating below their theoretical cost level. Supported by surging feedstock prices, sellers in China have announced price increases of US$40-50/ton on their export offers and CNY300-500/ton (US$45-75/ton) on their offers to the local market at the start of this week. Although sellers acknowledged that buying interest is thin ahead of the rapidly approaching National Day holidays in China, they commented that they are not willing to agree to any discounts on their new price levels for now as they expect to see further price increases in the days ahead based on bullish sentiment in upstream markets.