PET market sees a late summer comeback globally

Like many other polymers, China is helping to stabilize the PET market late summer as players respond to the recent crude oil prices and production outages at various cracker complexes and refineries in the region, as per Chemorbis. In the feedstock market, spot Asian PX prices began to rise nearly two weeks ago as crude oil prices rose followed by news of an outage at Daesan, South Korea affecting production at Samsung Total Petrochemicals and HC Petrochem. The PX market found further momentum last week when Formosa experienced its second fire at its Mailiao site that affected the refinery. With higher spot PX prices seen over the last two weeks of July, Asian producers announced increases of US$50-60/ton on their August PX contracts. While buyers are not ready to pay any increases, steady prices are being discussed. By last Friday, settlements were reportedly not completed, but players heard that some settlements had been made at a level just US$10/ton below the July contract. While producers may not have achieved their increase targets, the decrease, if agreed, would be sharply down from the previous months’ decrease of US$120/ton on the June PX contract, followed by a decrease of US$40/ton for July. Inside China a similar trend is seen from Sinopec who nominated its August contract at a rollover after settling both its June and July PX contracts at lower prices. In the PET market, the changing feedstock market has led to a stabilization in price levels this week after a declining trend. Inside China, producers lifted their offers this week followed by distributors. Korean PET producers, meanwhile, held firm to their prices and said they were not discounting their offers this past week. The US market which tends to follow Asia’s lead in feedstock settlements is now talking about potentially flat costs in August due to the Asian PX contract figures. Prevailing PET prices in Asia combined with high freight rates are also considered to be discouraging imports to the country, a factor which PET producers plan to use to retain margins going into next month. Similarly players in Europe were eyeing the contract developments in Asia last week and some felt that PX contracts could rollover in that region as well. While PET prices were down over most of the summer in June and July, some sellers are currently talking about stable prices for August due to the firmer costs, better demand and limited imports. They will have to contend, however, with the summer holiday lull. Back in Asia, players say that they expect producers to be firm with their PET prices for the near term, although they are not looking forward to any major increases because of the overall level of demand both in domestic markets and overseas.