European PET Resin Market Dynamics and Impact of Anti-Dumping Measures on Trade with China

Market Overview

The European PET resin market is on the brink of a potential demand surge in July, which could drive prices beyond current levels. Most European PET resin suppliers report steady sales growth, with May and June sales nearly exhausted and optimistic outlooks for July. However, some producers still have spare capacity, and utilization rates are increasing.

Regional demand varies. Southern Europe, experiencing high temperatures, sees robust sales for preform manufacturers in Mediterranean countries. In Northern Europe, the onset of summer has begun. Additionally, escalating sea freight rates are making local markets more attractive to buyers, while demand for virgin resin is supported by high prices of recycled resin.

With fundamentals improving steadily and inventories low among producers and buyers, a warm July in Northern Europe could lead to increased demand. Major sporting events like the European Championships and the Olympics will further stimulate demand. Limited supply in the Rotterdam area is expected to further drive price increases.

European Prices Showing Incremental Increases, Range Fluctuates

Domestic PET resin prices in Europe are gradually climbing due to strengthening demand, higher import costs, and diminishing spot supply. The current market price range is €1,130-1,170 per ton, with an average price of €1,150 per ton, up €10 from the previous month. With peak demand anticipated in July, inventory depletion and continued supply constraints are likely to sustain upward price pressure. 

Raw Material Supply Challenges Could Intensify PET Price Escalation

Despite some recovery in raw material price spreads in May, producers reliant on imported raw materials face challenges from rising sea freight costs and increased production expenses. While some producers are resorting to bulk PTA purchases, others are still grappling with import delays and container shortages. Concerns over tight PTA supply have been exacerbated by the closure of a PTA plant in Portugal, maintenance at a PTA plant in the Netherlands, and an unexpected shutdown at a petrochemical plant in Poland.

While the competitiveness of imported PET resin has strengthened, domestic price increases may revive the import advantage in the fourth quarter.

Impact of EU Anti-Dumping Measures on PET Resin Trade with China

On March 27, 2024, the European Commission announced definitive anti-dumping duties ranging from 6.6% to 24.2% on PET resin imports from China, with Wankai New Materials Group facing a duty rate of 10.7%. According to analysis by CCF, these measures have had limited direct impact on PET resin bottle grade trade but have significantly complicated trade flows. Consequently, there has been a diversification of export markets for PET resin bottle grade.

The supply gap left by reduced imports from China to the EU is expected to be filled by increased exports from other countries. This shift is likely to lead to higher imports from China to other destinations, reflecting adjustments in trade patterns. Additionally, the decision by Wankai New Materials Co., Ltd., to establish a production facility in Nigeria partly responds to these anti-dumping measures. Despite these regulatory changes, there remains cautious optimism regarding PET resin bottle grade trade with China.

During the period from 2021 to 2023, Chinese exporters notably increased shipments to Poland, subsequently rerouting goods to Ukraine, resulting in a significant 1409% surge in Poland's imports of PET bottle grade from China during this timeframe. 

Since early May, Chinese PET resin export prices have remained stable. Against this backdrop, imported resin may assist buyers in mitigating domestic supply shortages, although challenges such as shipping congestion persist. Expert analysis suggests that the EU's import advantage may re-emerge in the fourth quarter due to anticipated internal price increases.

For any information or business inquiries about PET chips, feel free to contact us at win-win@wkai.cc or sales@wkai.cc.

References: CCF analysis, CZ Insights