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MonthlySSESSMENTS: April China PET Prices

Author: SSESSMENTS

  • Local offers captured on a stabe to firmer trend
  • Export customers expressed buy idea between $20-60/ton lower
  • Blast occurred at Far Eastern China Industries PET plant, China's Ningbo Liwan PTA plant

China PET market faces upward pressure in April amid tightening supply ahead of traditional peak season. During the month, most producers and traders mulled a round of price increase. In the week commencing April 6, local producers have separately announced increases of between CNY50-500/ton ($7-70/ton) from last week, citing rising monomer costs. Similarly, some producers have instituted a price increase of between $5-40/ton to the export market during the same time frame. In the following week, the majority of Chinese suppliers maintained their high price quotes to the domestic and export market. On a week-to-week basis, local PET Bottle prices edged up between CNY150-200/ton ($21-28/ton), holding firm on the back of healthy demand and higher monomer costs. Meanwhile, export prices on a free-on-board (FOB) China basis were up by $5-10/ton over the same period. However, most export customers were reluctant to purchase at higher prices as the coronavirus pandemic continued to roil markets and upend business around the world; hence, expressing buy ideas at $20-60/ton lower than the initial offers on the low-end price range.

Moving to the third week, local PET prices in China hold steady amid tight supply. In the particular week, most local producers maintained a stable offer level as compared to last week’s level. Similarly, a producer rolled over export offers from last week, while a distributor revised down the offers between $10-15/ton on the high-end level of the price range. On April 28, one of the Chinese PET producers made a decision to lower their offers by CNY100/ton ($14/ton) in line with downtrend in monomer prices. However, on April 30, another PET producer initiated an upward adjustment on their offers to the local market by CNY100/ton ($14/ton) after monomer prices showed some rebound. All offers are compared to last week. To the export market, several Chinese producers kept the offer level unchanged from last week.

As summer approaches, China is entering peak consumption season, with beverage-bottle sales accounting for a major chunk of PET sales, leading to a significant increase in demand for raw materials. As a result, most suppliers and downstream factories faced short supply as demand builds leading to summer, when beverage-bottle consumption peaks. However, during the month, China posted lower PET sales compared with the same period last year since most buyers are reluctant to purchase in bulk as crude oil prices remain stuck on record lows and Coronavirus sparked fears of a global recession. On the production sector, since the market activity is back to normal in many parts of the country as disruptions from the outbreak faded, some producers started running at full swing since early April, while downstream factories were mostly running around 70-75% from the normal production capacity.

On the plant news, SSESSMENTS.COM demand and supply database noted that Jiangyin Chengold Packaging Materials Co Ltd, a subsidiary of Jiangyin Chengxing Group, has shut its two PET lines with each a capacity of 600,000 tons/year since April 23 due to technical issues. According to sources, the plant will be brought on stream in May. On April 17, a major fire broke out at China Far Eastern Industries. The company’s PET plant with a production capacity of 400,000 tons/year was affected by the blast. Due to this explosion, the plant will be shut for one and a half months. Market talks have it that a fire broke out at China's Ningbo Liwan PTA plant on April 30, which led to a shutdown of the 720,000 tons/year plant. Sources in China pointed out that this incident could affect the supply-demand balance across the PX-PTA chain and potentially affect PTA market sentiment this week, even though the production loss from the incident would exert minor influence on the current oversupplied market.

Looking ahead, market participants in China have mixed views on PET price outlook. Some sources expect local PET prices to move lower after peak season ends in June. However, others voiced out to SSESSMENTS.COM that China's PET prices will remain stable in the near term, backed by tight availability of spot domestic cargoes amid striking demand.

Click below to view related stories and content on China PET:

WeeklySSESSMENTS: China PET Prices W/C April 6

WeeklySSESSMENTS: China PET Prices W/C April 13

WeeklySSESSMENTS: China PET Prices W/C April 20

WeeklySSESSMENTS: China PET Prices W/C April 27

Range of local PET Bottle offers between April 1 to April 3 on cash, EXW China basis (including 13% VAT in CNY term, all equivalent in USD excluding VAT)

OriginTransaction TypeOffers (CNY/ton)Equivalent in USD/ton
ChinaOffer Given5,100-5,300639-664
ChinaOffer Received5,000626
ChinaSold5,200651

Range of export PET Bottle offers between April 1 to April 3 on LC at sight, FOB China basis

OriginTransaction TypeOffers (USD/ton)
ChinaOffer Given660-695
ChinaOffer Received650-655
ChinaSell Idea650-680
ChinaSold650

Range of local PET Bottle offers between April 6 to April 10 on cash, EXW China basis (including 13% VAT in CNY term, all equivalent in USD excluding VAT)

OriginTransaction TypeOffers (CNY/ton)Equivalent in USD/ton
ChinaOffer Given5,200-5,500651-689
ChinaOffer Received5,250658
ChinaSold5,500689

Range of export PET Bottle offers between April 6 to April 10 on LC at sight, FOB China basis

OriginTransaction TypeOffers (USD/ton)
ChinaOffer Given660-700
ChinaOffer Received660-690
ChinaSold670

Range of local PET Bottle offers between April 13 to April 17 on cash, EXW China basis (including 13% VAT in CNY term, all equivalent in USD excluding VAT)

OriginTransaction TypeOffers (CNY/ton)Equivalent in USD/ton
ChinaOffer Given5,350-5,500670-689
ChinaSold5,370-5,500673-689

Range of export PET Bottle offers between April 13 to April 17 on LC at sight, FOB China basis

OriginTransaction TypeOffers (USD/ton)
ChinaOffer Given700
ChinaOffer Received665-680
ChinaSold690-700

Range of local PET Bottle offers between April 20 to April 24 on cash, EXW China basis (including 13% VAT in CNY term, all equivalent in USD excluding VAT)

OriginTransaction TypeOffers (CNY/ton)Equivalent in USD/ton
ChinaOffer Given5,350-5,400670-676
ChinaSold5,400676
ChinaOffer Received5,200-5,250651-658
ChinaPrice list5,250658

Range of export PET Bottle offers between April 20 to April 24 on LC at sight, FOB China basis

OriginTransaction TypeOffers (USD/ton)
ChinaOffer Given650-690
ChinaOffer Received650-665

Range of local PET Bottle offers between April 27 to April 30 on cash, EXW China basis (including 13% VAT in CNY term, all equivalent in USD excluding VAT)

OriginTransaction TypeOffers (USD/ton)Equivalent in USD/ton
ChinaOffer Given5,100-5,500639-689
ChinaSold5,000-5,500626-689

Range of export PET Bottle offers between April 27 to April 30 on LC at sight, FOB China basis

OriginTransaction TypeOffers (USD/ton)
ChinaOffer Received650-665
ChinaOffer Given650-685
ChinaSell Idea650-685

Tags: Asia Pacific,China,English,Monthly,NEA,PET

Published on May 6, 2020 3:27 PM (GMT+8)
Last Updated on June 15, 2020 1:16 PM (GMT+8)