PET Market Sees Rising Costs and Upcoming Supply Increases

Key Takeaways

• PET Prices: Reliance PET is priced at Rs. 93,000/MT, Wankai 801 at Rs. 86,500/MT, and China PET at 6,300 RMB/mt.
• Production Costs: Crude oil and polyester raw materials increase PET production costs, steadily pushing up market prices.
• Supply Outlook: New production facilities are expected to boost supply, but near-term demand remains subdued among cautious downstream buyers.
• Demand Trends: Domestic PET demand may rise as Spring Festival stocking gains momentum and operating rates in key sectors increase.

PET Prices Across India

• The current rates for PET are as follows: Reliance is priced at Rs. 93000/MT for both Bhiwandi and Mundra locations, while Wankai 801 is available at Rs. 86,500/MT for the same locations.
• The domestic price for bottle-grade PET in the Chinese market is currently 6,300 RMB/mt.

PET Demand & Supply Trends: Impact of Festive Period & New Production Facilities

• The recent surge in international crude oil prices has directly influenced the prices of polyester dual raw materials, driving up production costs for PET. 
• Consequently, PET market prices have risen steadily. However, the anticipated commissioning of new production facilities is likely to increase supply in the near future.
• As the Spring Festival approaches, downstream buyers exhibit limited interest in replenishing inventories, suggesting that PET market growth might face constraints in the short term.
• Looking ahead, domestic demand for PET is projected to improve modestly as stocking activities for the Spring Festival gain momentum, coupled with potential increases in operating rates in both the oil and PET sheet industries. This expected uptick in demand could provide a cushion for the market amidst rising supplies.
• The PET market appears poised for moderate growth, supported by rising domestic demand during the festive period.

Polymer News

• Lotte Chemical Titan is operating its No.2 Steam Cracker at 70% of the actual capacity. The Cracker is located in Malaysia, and it has an ethylene production capacity of 511,000 tons per year.
• Wanhua has increased operating rates at its No.4 Propylene Oxide (PO) Plant. The Plant is located in Yantai, China with a production capacity of 400,000 Tons/Year.
• Braskem has increased its January Polyethylene (PE) grade prices by Real 800/MT, except for LDPE grade prices which increased by Real 1,000/MT in Brazil.
• INVISTA has reduced its January Nylon-66 Resin (U4800) prices by Yuan 400/MT from its December settlement levels and assessed at Yuan 17,900/MT in the USA.
• Sinopec-SK Wuhan Petrochemical Company has restarted its LLDPE and two HDPE Units after maintenance work of around three months. The units are located in Wuhan, China with an LLDPE production capacity of 300,000 Tons/Year and two HDPE units have a production capacity of 300,000 Tons/Year.

Expert Opinion

• The overall price trend remains susceptible to various factors, including the performance of upstream crude oil markets, policies impacting the polyester industry, and the operational timelines of new production facilities. 
• Additionally, changes in downstream demand and stocking behavior will be crucial to watch as they will dictate the market's ability to absorb increased supply levels effectively.