In Southeast Asia, import PET prices hit their lowest levels seen for the past 52 weeks, as per ChemOrbis. Lower upstream costs triggered by plunging crude oil prices continued to pull down PET prices while PET demand was moderate.
Crude oil prices on NYMEX recorded over US$5/barrel drops during this past week. Meanwhile, other upstream production costs continued to spiral down, too. PTA and MEG costs recorded very large decreases when compared with the beginning of October. PTA lost US$70/ton and MEG shed US$80/ton. However, these drops are even larger when comparing the spot market prices with the start of September. PTA prices indicate US$155/ton and MEG prices represent US$170/ton drops from early September. Coming to PX costs, they were slightly up by US$5/ton at the end of last week when compared with the beginning of October. However, when looking at the prices reported at the beginning of September, they are still US$175/ton softer.
Following these bearish developments on the cost side and poor demand, import PET prices in Southeast Asia dipped to the lowest levels recorded in a year’s time. Plus, weaker plastic futures prices also added to this decreasing trend. On a week over week basis import PET prices came down by US$10/ton on the high end but they recorded a larger decrease of US$60/ton on the low end on CIF Southeast Asia, cash equivalent basis.
A trader in Indonesia commented, “During the first week of October we had adjusted down our prices. However, we had to cut our offers further by $20-30/ton during last week in order to cope with thin demand. The market performs poorly and buyers are waiting for further declines. Chinese import offers are really competitive and our local market prices are not in the position to compete.” A Malaysian converter reported receiving MYR50-100/ton ($15-30/ton) lower prices in the local market. “Despite the decreases, we are not planning to make fresh purchases as we had already purchased some import Chinese cargoes before the National Day holiday and we still hold stocks. On another note, we see good end product demand. However, most players are in a wait and see mood given the recent decreases,” he further added. A Thai producer confirmed lowering their prices by THB500-1000/ton (US$15-30/ton) in line with declining upstream costs. “We are under pressure from the cost sides and from lower import prices. Therefore, we have to lower our prices in order to remain competitive. The only upside is that the weather is still warm in Southeast Asia, unlike the Northern hemisphere, so the end product markets are not performing that badly. Buyers are not holding high inventories but they continue to act cautiously as they prefer to watch upstream moves,” he noted.
According to ChemOrbis, a Chinese producer offering to Thailand, Vietnam and Indonesia reported cutting their prices by US$20/ton prior to the National Day holiday. The producer commented, “Upstream costs are falling as well as the PTA future prices and these factors are putting downward pressure on PET prices.”