Firm Feedstock Costs Stabilize Asian PET Bottle Market, But Demand Remains Weak

Asia's PET bottle market has stabilized after weeks of price declines, supported by stronger crude oil and feedstock costs. However, unlike several other polymer markets that witnessed a stronger rebound, PET prices have struggled to recover significantly as weak downstream demand and cautious buying continue to limit market momentum.

Prices across FOB China, FOB South Korea, and CIF Southeast Asia remained largely stable this week, indicating that higher production costs have created a price floor, although demand has yet to provide additional support.

Regional Markets Show Mixed Performance

China's export market and Southeast Asia's import market recorded a modest recovery earlier in July as rising crude oil strengthened production costs. However, the upward movement slowed toward the end of the month, with Chinese export prices easing slightly while Southeast Asian import prices largely stabilized as buyers resisted higher offers.

South Korea's export market followed a different trend. Despite higher feedstock costs, export prices continued to weaken before leveling off during the final week of July. Producers continued adjusting export offers to remain competitive in overseas markets.

Even after recent corrections, PET prices across the region remain well above levels seen before the earlier geopolitical tensions, reflecting the lasting impact of elevated production costs.

Higher Production Costs Continue to Support Prices

Although crude oil prices have experienced sharp daily fluctuations, average monthly prices remain significantly higher than they were a month ago, continuing to support the PET value chain.

Feedstocks including PTA, PX, and MEG have also remained relatively firm. In particular, MEG prices have increased steadily over the past three weeks, adding further cost pressure for producers.

As a result, most manufacturers have maintained their current offer levels rather than introducing aggressive price reductions despite uncertainty in energy markets.

Demand Still Limits Market Recovery

While Chinese exports continue to receive steady buying interest due to competitive pricing, overall regional demand remains subdued.

Most buyers across Southeast Asia are purchasing only small quantities to meet immediate production needs. Many converters continue to delay inventory replenishment, expecting additional price movements before committing to larger purchases.

Market participants generally agree that the recent stabilization has been driven mainly by higher feedstock costs rather than stronger consumption.

Looking ahead, firm upstream costs are expected to prevent another sharp decline in PET prices. However, a sustained recovery will depend on a meaningful improvement in downstream demand across the region.

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