Asian PET Prices Drop as Falling Feedstock Costs Weaken Market Support

Asian PET bottle markets have turned sharply lower this week, with prices declining across China and Southeast Asia following an extended rally. The previous upward movement had lifted China's domestic and export prices to around four-and-a-half-year highs, while FOB South Korea and CIF Southeast Asia prices had approached their highest levels in five to six months.

The correction began in China before spreading to Southeast Asian import markets. A sharp decline in crude oil futures and major feedstock prices, particularly PX and PTA, has weakened production cost support. At the same time, seasonal demand has started to slow and buyers have become more cautious, adding to the downward pressure on market sentiment.

China leads the regional PET price correction

China's domestic PET market recorded the largest weekly decline, with prices falling by up to CNY500/ton ($75/ton) from the previous week to around CNY8300/ton ($1100/ton without VAT), ex-warehouse China, cash, including VAT. Export offers experienced an even sharper correction, dropping by as much as $80/ton week over week. Notably, no export offers above $1200/ton FOB were reported, reflecting how quickly sellers have adjusted their prices following the reversal in production costs.

The decline in Chinese export offers has also affected Southeast Asian import markets, although price reductions there have been less pronounced. Offers below $1200/ton CIF have reappeared, while quotations above $1300/ton have almost disappeared. This indicates a significant change in regional price expectations. As Chinese suppliers lower their export offers, competing sellers are also facing pressure to revise their quotations, particularly as buying interest remains limited.

Crude oil and feedstock declines weaken production cost support

The latest price correction coincided with a steep decline in crude oil futures throughout November. Expectations of reduced tensions between the US and Iran following the US midterm election results outweighed concerns about possible supply disruptions.

The weekly average of Brent crude dropped from $116/bbl to $92/bbl within two weeks, reaching its lowest level in more than two months. This rapid decline weakened the energy-related cost support that had helped sustain PET bottle prices during the previous rally.

Major PET feedstocks also followed a downward trend. PX, PTA and MEG all recorded significant losses over the past two weeks, falling to their lowest levels since late August. PX registered the largest decline, losing around $195/ton, while PTA and MEG decreased by approximately $125/ton and $60/ton, respectively.

The simultaneous decline across the upstream chain has eased production cost pressure, giving sellers more room to reduce offers. It has also weakened buyers' willingness to accept the higher price levels seen during the recent rally.

Seasonal demand slowdown and cautious purchasing add pressure

Apart from lower production costs, weakening demand has further contributed to the bearish market outlook. A trader based in Zhejiang said the traditional peak season for PET bottle consumption was gradually coming to an end, with downstream manufacturers expected to reduce operating activity further in the second half of the year. The trader also noted that export orders had weakened as overseas buyers became more cautious amid price volatility.

A Ningbo-based trader likewise reported limited buying interest, saying most buyers had shifted to purchasing only according to immediate requirements while keeping inventories at low levels. Export demand remained subdued, with limited transaction volumes and little indication of an improvement in the near term.

The weaker sentiment has also reached Southeast Asian markets, particularly Vietnam, where expectations of further price reductions have discouraged fresh purchases. A Vietnamese trader said many market participants were choosing to wait for additional price adjustments rather than commit to current offers. The trader added that buyers were reluctant to replenish stocks because of the risk of holding expensive inventories if prices declined further.

A Vietnamese converter reported that import PET offers had decreased by around $10-20/ton, with January shipment prices potentially falling to as low as $1165/ton CIF for volumes exceeding 500 tons. However, the buyer still considered current price levels relatively high and anticipated further reductions, preferring to postpone fresh purchases rather than enter the market.

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