China Polyethylene Terephthalate Market weakens while Europe PET Continues to Rally Upwards

Marching towards the month-end, the PET market is on a downward trend due to fluctuating crude oil prices. Polyethylene Terephthalate is a lightweight plastic widely used in the packaging of foods and beverages, particularly convenience-sized soft drinks, juices, and water. The disruption of the Russia-Ukraine war and the Chinese lockdown in the aftermath of the Covid cases have wreaked havoc on Europe's and China's shipping industries. According to the ChemAnalyst database, PET prices have declined and settled at USD 1536/MT FOB Wuhu (China).

China being the world's largest exporter of PET bottles, has seen a drop in the demand from end-users owing to the ongoing pandemic situation in some Chinese provinces. The feedstock PTA market was also dull, with daily fluctuations in crude oil prices causing havoc in production units. The PTA plant in China has shut down again on March 16 for planned maintenance. Foreseeing firm demand from the downstream industries in the Asia-Pacific region resulted in a hike in the prices and settled at INR 120000/MT Ex-Depot Baddi (India). At present, the operating load of the sectors has also slowed, as has stocking willingness.

Due to the war-related situation in Europe, severe delays in deliveries from Europe and Asia have wreaked havoc on logistics. PET prices in Europe have been high since the beginning of the year and bottle-grade Polyethylene Terephthalate prices in the West have been steadily rising. Furthermore, the current market sentiments of PET globally are unbalanced, with good demand from domestic and offshore. These factors have eventually resulted in a visible increase in the cost prices. As a result, sellers believe that monthly offtakes will rise in tandem with good buying sentiments. Hence, Polyethylene Terephthalate prices in Europe were assessed at Euro 1600-1650 per MT on an FD basis as of last week of March.

According to Chem Analyst, "Prices for Polyethylene Terephthalate will remain high in the coming weeks as the season changes, resulting in strong demand from the downstream food and beverage packaging industries. Summer season, traditionally, been a peak season of demand for PET bottles and consequently demand from European countries may also observe another spike in the coming quarter.”