Asian PET sellers: June outlook is gloomy

In Asia, PET sellers had to step back from their offer levels in the export markets due to unhealthy demand, as per ChemOrbis. Since they cannot be sure of the market trend in June, many sellers opted for discounts on their offer levels in order to be able to conclude deals. Although demand is discouraging, buyers’ lower stock levels are still a sign of hope for some sellers. In China, overall export offers lost US$10/ton at both ends of the ranges on FOB China basis while local prices remained stable to CNY100/ton (US$16/ton) softer on ex-warehouse/FD China, cash including VAT basis. A buyer reported, “We received stable to softer local offers, but we are not planning to commit to new cargoes. We only do back-to-back business in order to avoid risks since we believe that prices may lose further ground.” A Chinese producer noted, “Given the softer feedstock costs, we lowered our local prices. Plus, our May sales performed even worse than our April sales. We were not rushing our sales at the beginning of May given our higher price expectations but then the month did not proceed like we wished. The market has followed a stable to softer trend. Now, we lack confidence regarding the June outlook.” Another Chinese producer reported lowering their export offers by US$10/ton in line with general market levels. “We could sell normally during this past week and we feel free from stock pressure. However, we do not think that there will be many price hike opportunities in June,” a source from the producer highlighted. A different Chinese producer in Jiangyin agreed on the unlikelihood of price increases in June and said, “Considering the traditional trend and past data, export demand may start diminishing in June. At the moment, we mostly focus on our sales. Plus, we are planning to add 300,000 tpa of new capacity to our existing production line in the next month but we have not set the exact date, yet.” A trader also remarked, “We are willing to offer some discounts in order to revive buying interest and we are not optimistic about June export business. Freight costs will be raised from Asia in June and there are some new capacities which will create further downward pressure on prices. Apart from Jiangsu Xingye’s 300,000 tpa line at their existing Jiangyin plant, Yisheng is building a new PET plant in Hainan with a capacity of 500,000 tpa. Both new lines are expected to start production in June or July.” On another note, according to the Official Journal of the European Union published on 23 May 2013, the Council of the European Union decided to lift antidumping duties on imports of PET coming from India, Taiwan, Thailand, Indonesia and Malaysia. A producer in Malaysia said, “We keep our offers stable but we are willing to negotiate our prices down by up to $20/ton as we need to compete with the prices offered for Chinese origins.” According to ChemOrbis, a trader in Vietnam added, “Our PET prices are stable from the previous week but we think that deal levels are likely to settle $10-15/ton lower when considering the lower counter bids we receive. Yet, we are seeing better trading activity these days.”