PET prices firm up on higher upstream costs in China

In China, the domestic PET market stabilized last week, while export offers also followed a steady trend supported by crude oil prices which crossed the US$100/barrel threshold, as per ChemOrbis. Chinese PET producers raised their prices this week on the back of stronger upstream markets in the wake of high energy prices, with recent hikes leading to expectations of a stable to firmer trend in the near future. A domestic PET producer hiked prices by around CNY200/ton ($31/ton) this week citing higher production costs while reporting achieving normal sales. The producer commented on the slowing local demand with respect to the past two weeks, but absence of sales and inventory pressure. Another producer raised local prices by around the same amount from last week due to firmer spot PTA and MEG prices along with their low stock levels following healthy November sales. The producer expressed an optimistic view on December business and expects prices to track a stable to firm trend in the days ahead. A distributor commented that local PET prices rose by around CNY100/ton (US$16/ton) at the beginning of this week supported by firmer costs. He managed to sell some cargoes at prices close to their new offers amidst normal buying interest. “We expect to see stable to firm prices in the days ahead,” he noted. A second distributor also increased prices by the same amount, given persistently rising spot feedstock prices over the last three days. He is planning to replenish stocks over the short term after concluding some deals in the past few weeks, expecting to see a steady to firm trend. Another local seller said that sales are normal this week on the back of firming oil prices along with higher feedstock costs. He predicts that PET prices will follow a stable to firm path as many PTA producers reduced their operating rates to prevent price decreases. Another Chinese distributor reported conclusion of some deals after raising prices by CNY100/ton in line with firming market levels. He mentioned achieving smooth sales on the back of the higher PTA costs along with some converters’ needs to build up stocks for the upcoming Chinese New Year holiday in end January, as per ChemOrbis. At the same time, he is not sure about the future market direction given an unclear global economic outlook. On the converters’ side, a manufacturer active in the beverage sector received PET offers with CNY50-100/ton (US$8-16/ton) increases from their suppliers. However, the converter has no plans to make any purchases for mow since they have built up some stocks during the past two weeks. They have raised their production capacity to prepare for the coming Chinese New Year holiday season. The export PET market followed a stable to firmer path with flat to raises of US$10-30/ton on offers from sellers compared to last week. A trader maintained his export prices, saying that he is unwilling to offer discounts during ongoing negotiations with customers given rising feedstock markets. Another trader offered mostly stable prices noting that buying interest from their overseas customers is sluggish. He added that some buyers show more interest in lower priced South Korean cargoes. On the upstream side, spot PTA, PX and MEG costs recorded significant increases in Asia. Spot PTA prices rose by US$30/ton week over week, while PX ad MEG costs increased by US$60/ton and US$50/ton, respectively.