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As demand in local market persist on the low side, couple of Chinese makers has initiated larger price cut this week for PET with hope to speed up sales process. On an average, local PET offers has dropped about CNY200/ton ($29/ton) this week, larger than a median of $10-20/ton in the past couple of weeks.

A producer opened offers at CNY6850/ton ($849/ton without VAT), EXW China, cash term said, “We were hoping better demand condition toward end of last week as the summer season is just around the corner, however, demand is picking up slower than expected.” The source also blamed the start up of two new PET plants, Zhejiang Wankai New Material and Hainan Yisheng Petrochemical phase I, which accounted for total capacity of 800,000 tons/year, to be one of the main factor dampen the sentiment.

Within first half of 2017, at least four (4) more new PET plants shall come online, brining a combined capacity of approximate 1.95 millions tons to the market. As reported on 18 November 2016, these new start up, in addition to the on-going anti-dumping investigation initiated by Indonesian and Japanese government on import PET from China are exerting strong pressure on the PET market.

Improving supply condition in the upstream market has caused both MEG and PTA costs to constantly softening since beginning of April, with values based on CFR China term dropped $45/ton for MEG and $23/ton for PTA. “And at the current energy market situation, very likely that we have to concede to additional price cut ahead of the ChinaPlast event,” another producer, whose offers stand at CNY6900/ton ($855/ton without VAT) EXW China, cash term said.

Domestic PET prices in China currently stand at CNY6850-7000/ton ($849-868/ton without VAT) EXW China, cash term.