Firmer PTA, MEG costs support increment in PET market

This week, several international suppliers have implemented $10-20/ton increases on import PET offers to Southeast Asia on the back of firming upstream costs. In fact, MEG costs based on CFR China term jumped $40/ton week on week basis to settle at $742/ton on Thursday. Meanwhile, PTA only gained approximate $15/ton during the same period to reach $625/ton.

Chinese PET offers below the $900/ton threshold are now becoming scarce and an Indonesian buyer purchased the cargoes at $910/ton CIF Indonesia, LC AS term said, “Our suppliers lifted prices by $20/ton week on week basis and we decided to replenish some quantity. Demand for our end product is just regular at the moment.”

Vietnamese buyers also reported receiving higher offer for Korean PET by $10/ton, reaching $940-945/ton CIF Vietnam, LC AS term. A converter said, “We have made sufficient purchases for two months production and currently we just adopt wait and see stance.” Meanwhile, several other buyers in the country are more conservative about fresh replenishment, expecting that the current firming trend might prove short lived.

In actual, many Asian players are sharing similar concerns. The recent surge in PTA and MEG costs are mainly driven by stronger energy market, improved macro environment and tight spot supply stemming from a number of plant shutdown as CommoPlast reported earlier. However, demand from the polyester sector normally slow down in July, which might weight down on demand side.

“Support for firmer trend appears to be relatively solid. Yet, we prefer to monitor the start up at new PET plants in China and the final decision from Indonesian government regarding the anti-dumping duty on import Chinese PET. The upside therefore appear to be limited,” a market source said.