Recent PET Industry Market Insights with the Upcoming Chinese New Year

Crude Oil Price Trends and Their Impact on PET Costs

Since early January, international crude oil prices have risen due to factors such as the cold wave in Europe and North America, new U.S. sanctions on Russia, and declining U.S. oil inventories. These factors have driven up PX prices, which in turn have pushed up prices across the polyester supply chain. China's polymerization cost recently surpassed 6,000 yuan, marking the end of a three-month adjustment period. 

However, after nearly two weeks of price increases, crude oil prices began to recede, leading to a drop in polyester prices and a reduction in China's polymerization costs back below the 6,000 yuan threshold.

Trump's Policy Shift and Its Impact on Global Oil Markets

On January 20, President Trump’s inauguration led to several executive orders, including a declaration of a national energy emergency and plans to boost domestic oil production. This policy shift reversed some of President Biden's initiatives, such as the "Green New Deal," and contributed to pushing global oil prices lower. These changes have impacted industries worldwide, including polyester production. 

The recent U.S.-China talks, coupled with Trump's expressed interest in visiting China, have raised expectations for improved bilateral relations. Such developments could positively affect Chinese assets abroad and benefit commodities like PET resin, as well as the stock market.

Crude Oil Market Outlook: Tight Supply and Ongoing Uncertainties

The sanctions on Russian oil continue to tighten global supply, leading to a strained spot market. While President Trump’s long-term plan to boost domestic oil production may alleviate some pressure, short-term concerns are focused on diplomatic relations, particularly between the U.S., Russia, and China. Additionally, both China and India have been increasing crude oil imports from the Middle East, making it essential to monitor the pace of recovery in regional supply.

The Impact of Chinese New Year

Despite the early price surge in January, the fundamentals of the polyester industry have remained relatively stable. However, many polyester producers are now reducing production or halting operations for seasonal maintenance, further tightening the market. As the Chinese New Year approaches, the industry is entering a “priced but unavailable” phase, with downstream sectors shutting down and logistics grinding to a halt. 

Seasonal maintenance and PTA/MEG inventory build-ups are expected to continue, and polyester operating rates for January are projected to stay between 84% and 85%. Post-Chinese New Year, the market’s price movements will largely depend on the recovery of polyester production rates and external cost factors. Given increasing uncertainties in global markets, additional volatility is expected.

Conclusion

As China’s Chinese New Year holiday period causes delays in PET production and logistics, global buyers should prepare for potential PET resin shortages and shipping delays. Beyond the holiday, fluctuations in crude oil prices and geopolitical changes will continue to impact the supply chain. Buyers should confirm production schedules, adjust procurement plans, and stay updated on market trends to effectively manage risks and ensure smooth operations.