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After hitting multi-month high levels during mid January 2018, import MEG to China started to chill off over the past seven trading days, loosing a total $28/ton from the peak to $1007/ton on 24 January.

It appears that pre-Lunar New Year replenishment in China has completed, which caused a drop in purchasing momentum, leading to a slip in MEG prices. As a result, several major Chinese PET producers this week down adjusted export offers by $15-20/ton week on week to reflect the weakened upstream market.

A trader offers Chinese PET at $1165/ton CIF Vietnam, LC AS term said, “The cuts have yet to stimulate demand from our regular customers. Market is highly volatile in recent days, and therefore, many prefer to hold cautious stance.”

Another producer offer export cargoes at $1135/ton FOB China, LC AS term added, “Local PTA market in China might soon see a surge in supply as a new plant with 700,000 tons per annum capacity comes online. Other producers are keeping offers unchanged week on week, however are facing difficulties in convincing buyers to enter deal.”

However, players are not expecting the current trend to sustain citing a possibility that demand from beverage sector might soon return as the traditional high demand season usually starts in March. “Room for further reduction is still presence due to weakening demand from polyester sector, yet there might not be any significant adjustment due to limited supply,” a market source said.

On the other hand, supply for recycle PET remain restricted as a result of the recent ban in import plastics waste. “We are optimistic about the medium term outlook in spite of a series of anti-dumping investigations in overseas markets. Domestic demand is picking up which might support prices,” another trader added.