Higher Rain Intensity And Floods In Some Parts Of China Drag PET Demand Further Down
- Some Chinese PET producers opened rooms for negotiation
- China’s Dragon Special Resin conducts a partial maintenance shutdown
- Market players predict that demand will remain weak in the upcoming months
SSESSMENTS.COM was told that higher rain intensity and floods in some parts of China drag PET demand further down. This week, some PET producers in China decided to maintain stable PET Bottle offers to the both domestic and export market compared to last week, but opened rooms for negotiation considering the unsupportive demand. A Chinese producer was willing to conclude deals in the domestic market between CNY100-200/ton ($14-28/ton) lower than the initial offer levels while deals in the export market were at $10/ton below the initial offer levels. On the other hand, another PET producer in the country adjusted down offers by CNY50/ton ($7/ton) compared to the same period owing to slight decreases in PTA and MEG prices. Export PET Bottle offers from Chinese producers this week range between $670-680/ton on LC at sight, FOB China basis.
Demand for PET Bottle in China is sluggish since most buyers have procured considerable volume previously. Some buyers also have placed forward orders for June to August in April and May. According to market players contacted by SSESSMENTS.COM, the intensity of rain this year is 10% higher than last year and led to severe flooding in some areas. The hardest hit areas are Jianxi and Anhui. The players further informed that floods aggravate PET demand conditions in those areas since manufacturers have to reduce operating rates or even halt production activities. On the supply side, a producer is having tight supply as the producer’s plant has not resumed from an unexpected shutdown yet. In the production sector, some PET producers in the country are not affected by the floods since the producers’ plants are not in the flooding area. China’s Dragon Special Resin conducts a partial maintenance shutdown at one of the company’s PET lines starting July 24 for a week. The maintenance will cause a reduction of 100 tons on the producer’s daily output. The producer is currently running at 80% of the normal rate and plans to resume production at maximum capacity in August.
Looking ahead, some market players foresee that PET Bottle offers in China will be stable to soft due to weak demand. Meanwhile, some others believe that the offers will move following the monomer cost. Pertaining to demand, the players opined to SSESSMENTS.COM that demand will remain weak in the upcoming months.
