- PET prices were in the downtrend during March
- Demand for PET Bottle in the local market was better than in the export market
- Chinese market players expressed pessimistic outlook due to several factors
PET price and demand trend in the China market were generally in a downtrend during March. On the first week of March, PET Bottle prices were mostly stable at CNY6,300/ton ($888/ton) on cash, EXW China basis and including 13% VAT. However, in order to move out the cargoes smoothly, market talks have it that some local producers were willing to sell at CNY6,150/ton ($866/ton)with the same payment and delivery term, depending on the volume of purchases. Starting from the week commencing March 9 until the end of the month, PET Bottle prices in the local market were on perpetual downward price adjustment following the downtrend of MEG and PTA prices due to the crash in crude oil prices. SSESSMENTS.COM noted that on the week commencing March 9 local PET Bottle in China went down between CNY200-400/ton ($28.5-57/ton). In the following week, the offers down between CNY100-400/ton ($14-56/ton), and between CNY100-150/ton ($14-21/ton) on the week commencing on March 23. All price comparison was on a weekly basis.
The same pattern was also seen in the export market. At the beginning of the month, the offers remained firm at between $790-820/ton on LC at sight, FOB China basis, with a room of negotiation between $10-20/ton. Bids submitted by Southeast Asian buyers at $760-770/ton with the same payment and shipment term rejected by the producer as it was deemed too low, as noted by SSESSMENTS.COM. On the week commencing March 9, export PET Bottle offers decreased between $15-40/ton and between $30-40/ton in the following week. In the last week of the month, on the week commencing March 23, the export PET Bottle offers had decreased further between $10-25/ton. Some producers were even willing to sell at $10/ton lower than the initial offer level.
In general, demand for PET Bottle in China local market was on a soft note. The peak season for PET Bottle demand that usually takes place in March on the back of preparation for summer season’s production is delayed for this year. However, Chinese market players informed SSESSMENTS.COM that demand in the local market was better than the export market. Buying appetite improved as China has handled the Coronavirus outbreak and buyers assumed that the prices have reached the bottom. While in the export market, buyers were uninterested in taking cargoes as mostly are worried that the outbreak outside China will push prices to decrease further.
On the production front, China Zhejiang Wankai’s 1.2 million tons/year PET plant reported running at 60-70% at the beginning of the month. In the following week, Hengli Petrochemical has achieved full operating rates at its fourth PTA unit following the start-up production on January 8. The PTA unit located in Changxing Island, Dalian City, China, has a capacity of 2.5 million tons/year. While at the end of the month, China’s Zhejiang Wankai New Materials has conducted a trial run at the company’s new PET plant in Chongqing Fuling on March 25. The new plant can produce 600,000 tons/year of PET. In total, the producer has a capacity to produce 1.8 million tons/year of PET. The commercial materials from the new plant are expected to enter the market by the end of the week commencing March 23, SSESSMENTS.COM was told.
In the days to come, Chinese market players stated that the outlook for the PET market is gloomy. PET Bottle price trend is expected to remain in a downtrend taking into account the slow demand stemming from intensified Coronavirus outbreak concern outside China. Besides, the materials from the new PET plant would also put pressure on prices, as stated to SSESSMENTS.COM.
