Weekly Review (12/08/2024 - 18/08/2024): PET Prices Decline Amidst Fluctuations in Polyester Raw Materials

PET Raw Materials

Last week, the PET raw material market experienced fluctuations, with crude oil prices showing some resilience. Brent crude futures rose by $1.8 per barrel, and WTI futures increased by $2 per barrel. Initially, oil prices surged due to heightened Middle Eastern tensions. However, as the situation stabilized and the International Energy Agency (IEA) revised its global oil demand forecast downward, oil prices retreated. Strong U.S. economic data later in the week provided some support, leading to a modest rebound in oil prices.

In the PET plastic supply chain, PX (Paraxylene) prices continued their downward trend, hitting a yearly low on Thursday. The average weekly price fell by 1.7% to $969 per ton. As PX prices dropped significantly, PXN spreads contracted, with the weekly average falling by 12% to $292 per ton.

PTA (Purified Terephthalic Acid) prices also decreased, with the PTA operating rate declining to 82.6% by Friday. The PET production rate was slightly adjusted to 86.2% due to shutdowns at some bottle-grade PET resin facilities, resulting in a continued buildup in inventory. Despite limited future maintenance plans, the anticipated peak season for the polyester industry is expected to bolster PET bottle-grade resin production and help manage PTA stock levels. The PTA forward curve shows a slight premium, with the January 2025 contract trading at a 44 RMB per ton premium over the September 2024 contract.

Ethylene glycol (MEG) prices remained under pressure, with transactions occurring between 4,530-4,610 RMB per ton. Overall, MEG fundamentals remain sound, and August maintenance is expected to exacerbate supply tightness, with increased polyester operating rates supporting mid-term demand. The MEG forward curve remains relatively stable, with the January 2025 contract trading at a 48 RMB per ton premium over the September 2024 contract.

PET Bottle-Grade Resin

In the PET bottle-grade resin segment, upstream raw material costs continued to decline, leading to slight reductions in prices by PET bottle-grade resin manufacturers. Despite this, processing fees remained above 550 RMB per ton. In the Asian export market, PET bottle-grade resin prices exhibited a weak and fluctuating trend, with overseas buyers making modest purchases at lower price levels. PET bottle-grade resin production facilities in China operated at an average rate of 70.6%, compared to a design capacity average of 77.9%.

China’s PET resin export prices followed the trend in raw material costs, remaining relatively stable at an average of $885 per ton by Friday. The average weekly spot spread between PET resin and raw material futures narrowed by $2 per ton to $11 per ton, increasing to $15 per ton by Friday. Although the forward curve for raw material costs remains stable, a slight forward premium has emerged, with a $10 per ton premium between September 2024 and May 2025.

Outlook

The past week saw fluctuations in polyester raw material costs, with PET bottle-grade resin processing fees remaining steady while some downstream sectors continued to replenish stocks. As operating rates increase, market supply is expected to recover gradually. PET bottle-grade resin prices are anticipated to follow raw material cost trends, although processing margins may face pressure. 

Over the next 12 months, the raw materials forward curve is expected to remain stable, with the PET market likely to experience continued weak adjustments in the short term. Asian PET resin export prices will largely depend on producer profitability and supply-demand dynamics in the mid-term.