SEA PET market remains on stable to soft track; hope for rebounds holds strong

Overseas suppliers have been hoping to lift import PET bottle prices to Southeast Asia following the return of Chinese buyers from the weeklong National Day holiday that stimulated local demand in China to a certain extent. However, restricted demand in Southeast Asia and weaker upstream costs are hurdling the effort.

Compared to the cyclical peak during early September 2018, the average import prices to Southeast Asia have plunge approximately $85/ton, data from CommoPlast showed. 

“We opened new offers for Chinese origin cargoes at $10/ton reduction week-on-week and have not been able to conclude any deals this week. Buyers are turning to non-dutiable South Korean cargoes at more competitive levels,” a trader offer Chinese PET at $1310/ton CIF Vietnam, said.

At the time this report is published, South Korean PET bottle is offered at $1330-1340/ton with the same term to Vietnam, which is not subjected to 5% import duty.

Several Vietnamese buyers continue expressing the plan to make new purchases in preparation for Lunar New Year demand, “However, our buy ideas for Chinese materials are below the $1250/ton threshold. Market in highly volatile recently, therefore, we prefer to be cautious,” a converter added.

Meanwhile, an agent maintains price list unchanged at $1280/ton for Chinese cargoes to Indonesia and managed to conclude some deals at discounts. “The currency exchange rate is killing import business. It might become more difficult to attract deals in Indonesia in the near term now that buyers have completed the quota for BMDTP scheme,” the source added.

In the upstream market, PX costs based on CFR China/Taiwan plunged to three weeks low on 16 October 2018, at $1300/ton. This trend is not expected to persist considering the healthy demand from the downstream PTA and fiber sector. Such expectation is nurturing the hope that PET market would receive some support to rebound in the coming days.