News Code : 43785

Petrotahlil :2019 has been a year of decreases for the PET bottle markets across Asia as prices tracked a downtrend for the most part of the year and reached multi-year lows before they turned upwards a few weeks ago.


In China, the bearish trend dominating the overall picture of the year was primarily driven by a lack of demand both at home and overseas. Lower upstream costs, prolonged trade tensions with the US along with a slowing global economy suppressed market activities during the year.


PET was largely on downtrend during April-Dec


In China, PET started 2019 on a stable to firm note and was able to maintain that trend in the first quarter. However, the sentiment shifted in April as suppliers’ further hike requests started to meet resistance from buyers amid lower upstream costs.


If the two short-lived rebounds in June and in September are disregarded, PET bottle prices on FOB/ex-warehouse China basis followed a downward trend from around mid-April to early December, according to the weekly average data from ChemOrbis Price Index.


Prices rebound from nearly 4-year low


As can be seen in the graph above, the market hit a nearly four-year low three weeks ago before Chinese suppliers elected to raise their December offers pointing to rising crude oil futures and higher PTA and paraxylene prices. “Easing US-China trade tensions have also boosted sentiment and helped sellers regain confidence,” players commented.


However, the firming PET trend has lost some pace this week as sellers’ firm stance has faltered in the face of disappointing demand amid the ongoing winter season and the upcoming Chinese New Year holiday. Export activity has also reduced due to the year-end lull.


New capacities and holidays weigh on January outlook


Players have been adopting a cautious approach to the recent rebound of PET prices as new capacities and the upcoming holiday are weighing on g the outlook for January.


China is readying to welcome new PET capacities of more than 1 million tons/year in the first two months of 2020. Sources close to the companies reported that Hainan Yisheng Petrochemical and Zhejiang Wankai New Material are planning to launch their PET lines in the January-February period.


Additionally, market activity is expected to decline in line with the approaching holiday. “Most players will be away from their desks in the second half of January due to the Chinese New Year holiday. We believe that demand will start to improve only from February onwards as the holiday will be over and the winter season will approach to its end,” a trader opined.

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Source :ChemOrbis


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