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As demand across the region remains mostly flat since earlier this month, it is reported that couple of major Chinese PET producer this week continue to step back on their offers in both local and export ground with hope to stimulate purchasing activities. The result appears to be a bit disappointing, however, outlook for the second half of the month hold optimism.

Domestic PET offers reportedly go down by another CNY100/ton ($15/ton) week on week basis with a beverage bottle manufacturer added, “We think market is still far from the bottom, therefore we plan to hold wait and see stance at the moment. Our end product business has yet to see any significant improvement. It is too risky to build up stock now.”

A producer said, “Besides the sluggish demand condition from the downstream converters, the upstream costs have also softened. We hope this situation is just temporary as the beverage sector would enter the seasonal high demand starting late March.” The producer has also slashed export prices by $20-30/ton to reach $1000-1010/ton FOB China term.

Indeed, MEG costs based on CFR China term have been steadily decreasing since it hit the multi months high levels early February. In a time span of a month, MEG costs fell approximate $100/ton and might see additional discounts in the coming days. In the medium term, both MEG and PTA costs might regain the momentum in line with a series of plant shutdown. At least fifteen MEG plants in Asia and Middle East are undergoing maintenance shutdown from February to May, which might tighten supply once downstream plant ramp up production rate.