Shanghai, China: The market sentiment for Polyethylene Terephthalate (PET) is currently stable, with an overall downward momentum. The stability in prices has been mainly due to the sufficient inventories among the downstream enterprises. At the same time, offtakes from the Packaging sector kept reducing during the considered week.

On-demand side, downstream demand for Polyethylene Terephthalate bottles from the packaging sector was allegedly lower in Southeast Asia, as China is still enmeshed in COVID-19 lockdowns throughout cities. Due to the scorching summer, demand has been somewhat expected to increase in Southeast Asia, but bids have remained mainly low. Inline, low buying interest has further slowed the output rate, and the purchases were made possible only because of lower freight costs and continuing decline in crude oil prices.

Meanwhile, stocks have continued accumulating due to the substantial demand reduction occurring since last month, while producers appear to be more flexible during discussions. As the rupee value weakens against the US dollar, spot purchases have been limited, resulting in sluggish demand in Southeast Asia. According to market sources, “There is an expectation of slight improvement in the end-use food packaging sector, and they hope for recovery which can keep prices stable.”

In addition, Feedstock prices fluctuated despite a sharp decline in the price of crude oil. Feedstock Paraxylene stabilizes while Purified Terephthalic Acid (PTA) and Mono-Ethylene Glycol (MEG) fluctuate, but mainly on a downtrend. Amidst stability in feedstock prices, the upstream cost involved in Polyethylene Terephthalate (PET) production has been observed to be rolling over, resulting in its price steadiness.

According to the ChemAnalyst database, “The majority of market participants in China and Southeast Asia do not expect any significant price increases in the upcoming weeks, as demand for Polyethylene Terephthalate (PET) remains under pressure. “