Polyethylene Terephthalate (PET) resin prices continued to surge in the US market during the first three weeks of June. This increase is attributed to supply disturbances amid firm demand from the downstream PET bottle and beverages industry. Consequently, in the early part of the month, PET resin prices rose by approximately 1.1% due to these factors. However, PET feedstock prices exhibited an opposite trend. PTA prices remained stable, while MEG prices declined by about 2.3% due to high inventory levels. This decline in MEG prices is also linked to demand softness and high inventory in the US crude oil market.

Moreover, PET supply in the US remained steady during the early week, bolstered by optimistic production capacities. This stability continued despite Far Eastern New Century/Phoenix Technologies International LLC in Ohio facing a force majeure event due to a power outage in late May. Meanwhile, in China, PET inventories at major ports stayed at manageable levels, suggesting a balanced market without signs of oversupply or shortage.

Later in the week, difficulties continued to escalate as cross-border PET shipments to the US via Laredo slowed due to disruptions in Mexico. Tropical Storm Alberto caused severe flooding in northeast Mexico, disrupting power and closing roads in Monterrey's manufacturing cluster. Container shipments to Altamira and Tampico ports were affected, though both ports have since reopened. With 636mm of rain recorded on June 20, flooding led to mudslides and significant traffic delays on alternative routes, culminating in the closure of all northbound highway lanes on June 21. Ultimately, Storm Alberto severely disrupted the supply chain in both Mexico and the US, significantly impacting PET prices by causing delays and increasing costs due to flooding and road closures.

Adding to the complexity, US container import spot rates from North Asia and Southeast Asia hubs reached their highest levels in nearly two years. This surge was partly driven by diversions in the Red Sea, causing significant capacity issues in East Asian shipping lanes. On June 7, shipment rates from East Asia to the West Coast of North America increased by 17%, and by 11% for East Coast imports, impacting overall PET prices. On the other hand, exporters saw freight costs decrease by 8.5% for shipments from the North American West Coast to East Asia and by approximately 5% for exports from the North American East Coast.

On the demand side, amidst supply disruptions and material shortages, downstream markets engaged in panic buying of PET resin due to limited inventory, exacerbated by increased summer demand. Despite overall market demand not reaching exceptionally high levels, manufacturers rushed to secure supplies. This surge in procurement reflected concerns over future scarcity, temporarily driving up PET resin prices and highlighting market volatility amidst ongoing supply challenges.

Conclusively, analysts anticipates that PET prices may stabilize in the final period of the month, following a consistent surge since the beginning of the month.