US PET Resin Market Braces for Price Fluctuations as Hurricane Hilary Disrupts Supply Chains

In the initial half of August, PET Resin Bottle Grade prices in the US gradually increased, followed by stabilization owing to equilibrium in supply and demand. Nonetheless, the last week of the month is projected to bring about a resurgence. PET resin prices are anticipated to climb in the upcoming week due to the possible reduction in imports from neighboring Mexico, driven by the effects of Hurricane Hilary. This hurricane's influence could disrupt trade operations, resulting in decreased imports and potentially affecting PET Resin prices again in the US market.

During the first half of the month, the US PET Resin Bottle Grade industry witnessed growth due to the surge in upstream naphtha prices. The continuous escalation in naphtha prices bumped up overall production expenses. Interestingly, Ethylene, a key raw material, also contributed to higher production costs as it remained costly during that period. On the demand side, the need for downstream plastics and textiles exhibited moderate growth, primarily driven by essential requirements. By the second week of August, the price of PET Resin Bottles Grade had risen to USD 1122/MT FAS Houston.

In the latter half of the month, the PET Resin Bottle Grade market experienced price stability after a slight improvement in demand. The prices of feedstocks Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG) eased due to reduced crude oil trading. However, demand from downstream plastic and packaging sectors remained subdued as these industries continued to make purchases solely on a necessity basis. The overall PET resin price stability prevailed despite fluctuating demand and decreasing production costs.

Currently, the US is grappling with the consequences of Hurricane Hilary, which is predicted to impact the supply chain in Southern California. This disruption will particularly have repercussions for Long Beach and Los Angeles ports. This situation is expected to compel manufacturers involved in end-use packaging to pause or curtail their operations, subsequently impacting various commodity prices, including petrochemicals. The hurricane's influence has also impeded exports from the Mexican region. The storm, classified as a potent Category 4, made its way along Mexico's Pacific coast, posing a significant threat of heavy rainfall to the landslide-prone border city of Tijuana before advancing into Southern California.

In light of these factors, ChemAnalyst forecasted the increase in PET resin prices in the US market for the upcoming week. The influence of Hurricane Hilary on port activities, supply chain interruptions, closures, labor shortages, and shipping delays is expected to lead to reduced chemical supplies. This, in turn, will likely contribute to an upward push in PET resin prices in the US market.