Higher feedstock costs push Asian PET higher

Trading activities have improved in the Asian PET market over the past week as overall offer levels are supported by the higher feedstock costs, as per Chemorbis. Spot PX gained US$35/ton CFR Northeast Asia on the week, while prices reached the highest levels reported since May, surpassing the US$1000/ton threshold. Meanwhile, spot PTA prices gained ground by US$5-10/ton on CFR China basis on the back of the better demand for this product. Spot MEG, offered on CFR China basis, also recorded modest increases of US$5/ton on week over week basis in the region. Looking at the import market, Korean PET prices showed a slight increase of US$5/ton FOB Busan, but towards the end of the week, buyers started to complain that the low end of the offer range was really hard to find as the prices generally started to centre on the US$1200/ton threshold and above. Most overseas producers lament tight availability and therefore, they are not willing to offer discounts while some claim that they can achieve deals at or close to their current offer levels easily. Yet, buyers continue to pronounce that offer levels are getting too high to be acceptable. In China’s export market, prices showed similar increases to the import market by escalating around US$5-10/ton. Most producers elected to issue either rollovers or increases of up to US$10/ton. These producers point to the higher feedstock costs at firm levels in order to justify their hikes while most of them feel comfortable regarding their stock levels. The fact that a large sized Ukrainian PET buyer issued a tender for 7,000 tons of PET also supported the market sentiment in the middle of this past week. The buyer had already purchased 5,000 tons of Asian PET in early September. Now, most players speak more confidently about the current firm trend by saying that it is likely to be maintained over the near term since this large buyer has been purchasing frequently. Considering these regular purchases, firm feedstock costs and the fact that producers are not under a serious sales pressure, sellers expect the firm market trend to continue and they do not want to offer discounts. However, it should be noted that traders are not as hopeful as producers since they complain about not being able to achieve any major deals over the past week due to the buyers’ lower buy ideas. Therefore, many traders avoid replenishing their stocks. The market panorama is not much different inside China as the overall offer range moved up by CNY100/ton (US$15/ton) over the past week at both ends while the offers standing at the low end of the range have been swiftly fading. Meanwhile, producers have further price hikes of CNY100-200/ton (US$15-30/ton) in their minds on the back of the firm upstream markets. Some even started to restrict their sales quantities while several buyers re-entered the market with the fear of further increases in the days ahead although they are not feeling optimistic about their end product business in October.
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