PET prices softening in Italy, expected to firm in China

Spot PET prices are expected to gain some ground at the lower end of the range in the Chinese market this week as sellers are likely to take a firmer stance on prices given higher energy costs, as per ChemOrbis. In Italy, spot PET prices for July have been announced with decreases over the past two weeks in line with lackluster PET demand as well as lower feedstock settlements for July in the European market. In Italy, spot offers for both South and West European origins have been reported with €40-50/ton decreases from June spot levels, with this decrease amount closely following the approximate reduction of €40/ton in PET production costs based on the July contracts for PX and MEG in the European market. Converters receiving these offers commented that offers for West European origins are more competitive than for South European origins for this month, at around €20-30/ton lower than the spot offers for South European origins. Trading activity has been limited in the Italian spot market for July as most converters say that they are not in urgent need of material these days as their end product demand is sluggish this month. In China’s PET market, prices for domestic material were reported mostly unchanged over the past week while spot prices in the export market witnessed slight declines of around US$10/ton. Players are expecting to see some price increases in both local and export PET prices this week in line with higher upstream costs, as spot naphtha prices have gained nearly US$70/ton on a CFR Japan basis since the start of the month, while crude oil futures on the Nymex have risen by around US$2/barrel over the same time period. Buyers are still said to be hesitant about concluding deals at present, with most buyers only securing enough material to cover their immediate needs, while trying to evaluate the likely direction of the market. Spot MEG prices have declined over the past week now that Taiwan’s Nan Ya is in the process of restarting its 1.78 mln tpa MEG plant in Mailiao while spot PTA prices have firmed up slightly in line with a rally in the PTA futures market last week. PET sellers inside China reported that offers at the lower ends of the range are becoming increasingly difficult to locate these days, with most domestic producers saying that they are maintaining stable price levels for now so as not to frighten away their customers. In the export market, Chinese traders reported that they are receiving a good number of price inquiries these days as overseas buyers find Chinese PET prices to be competitive when compared with offers for other Asian origins.