Recent Trends in the PET Market Driven by Crude Oil

During China's National Day holiday, geopolitical tensions in the Middle East led to a significant rise in oil prices, with WTI (November contract) and Brent (December contract) reaching six-week highs of $77.14 and $80.93 per barrel, respectively. This marked increases of $8.97 and $9.23 compared to September 30, translating to approximately 13% growth. The surge in oil prices has driven up costs across the PET supply chain, with upstream futures products like PX, PTA, and MEG opening sharply higher in early trading yesterday, contributing to a rise in spot prices.

On the supply side, several Chinese factories have restarted a total of 700,000 tons of PET production as of mid-September, resuming output of certain side chips. Additionally, a new 200,000-ton PET chip facility began operations in early October, with no current plans for reductions or shutdowns of existing plants. Consequently, the supply of PET chips is expected to see a slight increase in October compared to September.

Given the current processing margins for PET chips, price trends are likely to closely follow fluctuations in raw material costs. The recent price hike, driven by unexpected increases in oil prices, will be closely tied to movements in the oil market. Following a recent easing of tensions in the Middle East, oil prices have started to decline. Despite this, due to the ongoing tensions in the Middle East, oil prices have shown unstable conditions, leading to unpredictable fluctuations in the costs of PET production raw materials. 

As a result, market participants should remain vigilant and keep a close watch on the trends in both oil prices and the costs of polyester raw materials in the future.