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In Asia, limited supply has been pushing MEG costs up steadily since early November, which also elevated PET prices in the region, especially from China. However, MEG based on CFR China fall six straight sessions after hitting the peak earlier last week, slashing $60/ton to reach $830/ton on Tuesday. Chinese PET suppliers responded immediately to the softer upstream costs.

Prices above the $1000/ton threshold are not found in the market this week with one of the major producer cut offers by $30/ton on their export offers, to reach $990/ton FOB China, LC AS term. A trader commented, “It is time for correction as Chinese PET has been traded above other Fareast Asia origin, which is very abnormal. Demand is diminishing as market is entering the holiday mood.”

MEG might continue to soften in the near term as supply is improving in local China after the restart of several major plants. As a result, players are also looking at further discount on PET cargoes to emerge, especially offers at the upper end of the overall price range. “We think market is entering the off-peak season for both beverage bottle and polyester sectors. Demand would therefore only pick up again in March, where the traditional high demand season for PET bottle start.”

Export PET from China this week stands at $960-990/ton FOB China, LC AS term.