PET prices recorded increases in Asia, Europe and the US despite the fact that the high season has faded away. As per Chemorbis, this firm trend is mainly down to the strong upstream costs around the globe as they push up the PET prices.
In Asia, South Korean PET prices gained US$10-30/ton increases on FOB Busan basis compared to last week. Producers are not willing to offer decreases, pointing to the fact that they are not feeling under inventory pressure. Some even claim to be able to conclude deals close to their offer levels although traders complain about not being so successful about doing back to back business due to the large gap between buy ideas and the producers’ offers. In China’s export market, offer levels also gained ground by US$10-40/ton with respect to last week on FOB basis. Most producers highlight the fact that they are neither under stock or sales pressure and therefore, they are unwilling to offer discounts even in return for firm bids considering their high production costs. These producers, too, noted being able to conclude deals with their regular customers at or close to their offer levels, albeit for small volumes. Meanwhile, traders mostly lamented the poor demand as they prefer to stand out of the market.
Looking at the upstream markets, PX feedstock costs came down $25/ton on CFR Northeast Asia basis while PTA lost ground by US$15/ton and PX retreated by US$20/ton on CFR basis over a week’s period. However, these decreases do not signal relief on the feedstock costs since the upstream costs are still significantly higher when compared to the start of the month. In fact, spot PX offers are US $150-155/ton higher while PTA is US $85/ton higher and MEG is US $105/ton higher when compared to the beginning of October.
In Europe, October PET contracts settled with €40-45/ton increases on FD NWE basis with producers recovering their losses in September. This increasing trend is also down to firmer upstream costs in the region as feedstock costs followed the firming trend in Asia. Despite the fact that spot PX prices slightly softened by US $5/ton over the week on FOB NEW basis, offers are still US $100/ton higher when compared to the beginning of October.
Looking at the US, PET producers already announced US $88-110/ton (4-5 cents/lb) increases for November PET prices, revising their hike targets up to US $198/ton (9 cents/lb), following the higher Asian market. These increase targets also see support from the general market expectations regarding higher PX and MEG contracts for the next month. The increase anticipations centre on US $110-220/ton (5-10 cents/lb) hikes for these feedstocks. Currently, spot PX prices are US $40/ton lower from last week on FOB USG basis but they are still US $125-130/ton higher when compared to the start of the month. Meanwhile, demand continues to be healthy amidst these increases despite the high season has already ended.