Supported by firmer upstream costs, PET prices in Asia continue to move upwards, as per Chemorbis. Spot PX prices, which are US$25/ton firmer this week, indicate a US$105/ton increase FOB Korea basis when compared to the beginning of the month. Additionally, two global producers nominated their January PX contracts with US$125/ton and US$155/ton increases on CFR Asia basis for December contracts. Spot PTA prices represent a ten dollar per ton increase on a weekly basis although they are US$30/ton higher compared to the 1st of December on CFR China basis. Meanwhile, MEG prices are US$60/ton higher when compared to the start of the month while they are US$25/ton higher with respect to the previous week.
Most Korean producers elected to issue US$10/ton increases on their PET export offers, pointing to higher production costs. As a result, the overall offer range out of Korea also moved up by US$10/ton at both ends on week over week basis. In China’s export market, offer levels gained US$30/ton at the high end of the overall offer range although the low end remained stable. Most PET producers chose to lift their prices by US$20/ton on the back of the higher feedstock costs and they are adamant about insisting on their current prices. Although some buyers are sidelined from the market following the recent hike announcements, most producers express an optimistic outlook about seeing better demand in the upcoming days. In China’s domestic market, players saw a steady trend this week with producers' offers firm, pointing to the higher upstream costs as well as the fact that they feel free from stock pressure. “Plus, more buyers were engaged in purchasing activities,” some highlighted. In addition to the firmer upstream costs there are some plant shutdowns inside China which support producers. Dragon Special Resin shut down its 240,000 tons/year PET unit on December 11 for a one month maintenance while Shengzhiye Polyester also reportedly shut down its 240,000 tpa PET unit on December 12 for a three-week maintenance. A major producer in the South, which has a total capacity of 650,000 tpa, reported to have restarted a plant on December 8 after a maintenance shutdown.
More buyers were active in the market looking to make some fresh purchases ahead of the approaching Chinese New Year holidays as they want to have some stocks before lifting their operating rates. Yet, they are still reluctant to purchase in large volumes at the current high levels.
Looking ahead, PET prices are likely to maintain their firm trend unless a major drop occurs in upstream costs and gives buyers a chance to push for decreases. Meanwhile, the approaching Chinese New Year is expected to give a boost to the buying interest in the upcoming days although players are still concerned about a potential interest rate hike from the Chinese government which could dent demand.