2021. 1. 18.

ICIS Polyethylene Terephthalate Asia-Pacific - Pricing & Insight-15-Jan-2021

Polyethylene Terephthalate (Asia-Pacific)

By Hazel Goh
15-Jan-2021

Overview Outlook Prices Upstream Production Other Regions Analytics

Please click here for full details on the criteria ICIS uses in making these price assessments.

OVERVIEW

Bullish sentiment continues amid firmer crude and naphtha prices

Some Asian sellers limiting sales volume amid price uptrend
Firm container freight costs keep some buyers on a cautious stance

Bullish sentiment continues amid firmer upstream crude and naphtha prices.

Firmcontainer freight costs are keeping some buyers on the sidelines. Many buyers were heard to be on low
inventories and were hoping for the firm prices to be just a phase. However, it has been a few months since initial
hikes in container freight costs and spot polyethylene terephthalate (PET) prices on an FOB basis had been on a
rise too. While many buyers had returned to purchase, some are still cautious with hopes for firm container
freight costs to ease post-Lunar New Year holidays.

Producers have little sales pressure with low inventories amid recent and ongoing plant shutdowns,
while domestic demand for many Asian regions were faring well. Some Asian sellers had limited sales volume
amid the price uptrend and a healthy quantity of on-hand orders.

Feedstock Spread - PTA, MEG and PET China

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OUTLOOK

Bullishness likely to continue on producers’ low inventories and healthy sales pace

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Container and vessel tightness still no signs of easing

Ongoing and upcoming plant maintenance to keep spot supply snug

PRICES

SPOT PRICES
Price Range Four Weeks Ago US CTS/lb
PET Fibre Grade
CFR NE Asia USD/tonne +10 810-840 +20 695-745 36.74-38.10
CFR India USD/tonne +10 810-840 +20 695-745 36.74-38.10
FOB NE Asia USD/tonne +10 800-830 +20 685-735 36.29-37.65
PET Bottle Grade
FOB South Korea USD/tonne +30 840-860 +40 740-770 38.10-39.01
FOB Taiwan USD/tonne +20 860-915 +35 770-840 39.01-41.50
FOB China USD/tonne +25 780-820 +30 720-750 35.38-37.19
FOB SE Asia USD/tonne +10 870-930 +30 775-840 39.46-42.18
FOB India USD/tonne +50 930-940 +40 850-860 42.18-42.64
PET Film Grade
FOB E Asia USD/tonne +50 850-920 +60 750-780 38.56-41.73
 

Fibre grade

(Unit: $/tonne FOB NE Asia)

Origin Offers/seller’s workable level Deals

Taiwan 800-850 800-830

Korea 780-790 (no spot volume) Nil

Discussions on CFR bases were subdued and hence assessments were notionally placed at $10/tonne above FOB
NE Asia.

Bottle grade

Spot volume availability from South Korean producers were limited on the back of healthy sales, stable domestic
demand and upcoming plant maintenance in February. South Korea previously saw healthy sales volumes to the
EU, but this has not been the case since the bulk of 2020, on the back of the pandemic undermining demand and
later, the firm freight costs.

Chinese producers had low inventories and healthy on-hand orders, leaving them bullish on offers amid the
recent feedstock and upstream price increases. Sales volume were mixed across different producers, depending
on cargo availability and customers’ preferred laycan for cargo delivery. Export volume was commonly heard to
be heading to Africa and the Middle East.

Prices for Taiwanese and southeast Asian cargoes remained at a wide range, depending on producers and
discussions.

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India exports remained limited on the back of robust domestic demand and a plant shutdown. As such, offers
continued to increase more than other Asia-origin cargoes on the back of limited availability. Some sporadic deals
done at firmer levels were heard largely heading to Latin America.

Prices were assessed to reflect deals and discussions that were representative of the broader market.

Deals and discussion (Prices in $/tonne)

Incoterm Price Remarks Shipment

FOB South Korea 850-870 Offers with limited Feb

availability

FOB South Korea 840-860 Most deals Feb

FOB South Korea 865 Sporadic deal Feb

FOB Taiwan* 840-935 Deals and discussions Feb

FOB Taiwan* 860-915 Broader market deals Feb

FOB China 790-850 Offers Mostly Feb

(low end seen in early
week ,
high end seen towards en
d of week)

FOB China 780-820 Most deals Mostly Feb

FOB China 830 Sporadic deals Mostly Feb

FOB SE Asia* 875-940 Deals and discussions Feb

FOB SE Asia* 870-930 Broader market deals Feb

FOB India 930-940 Deals and discussions Feb

with limited availability

FOB India 965-1,000 Offers and limited deals Feb

(unconfirmed)

*In Taiwan and southeast Asia, prices may differ significantly among the different producers in the same region.

Film grade

Offers were up on the back of recent feedstock price increases. There was limited room for negotiation amid
stable and regular demand, and limited availability from sellers. The stronger market conditions in other PET
grades also helped to buoy offers.

Discussions in recent weeks (Unit: $/tonne FOB East Asia)

Origin Offers/seller’s workable level Deals

Northeast Asia Around 850 Nil

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Southeast Asia 920 920

UPSTREAM

Click here for the Asia feedstocks and petrochemicals weekly summary.

Asia-Pacific naphtha prices reached fresh highs in a year amid increased buying for second-half February-
arrival cargoes. The product’s crack spread strengthened to a 13-month high earlier in the week
alongside gains in crude oil futures.

The crude price rally ran out of momentum in the week as a resurgence of coronavirus infections in
Europe and China threatened to derail the oil demand recovery. However, the rollout of vaccines and
deeper output cuts from Saudi Arabia kept a floor under prices.

Crude oil 15-Jan* 08-Jan 01-Jan** 25-Dec**

ICE Brent 55.74 55.99 N/A N/A

WTI 53.09 52.24 N/A N/A

*Prices at 15:00 Singapore time

** Market closed

FEEDSTOCK SPOT PRICES

Price Range Four Weeks Ago
PTA
CFR China Main Ports USD/tonne +18 530-570 +22 469-505

 
FEEDSTOCK CONTRACT PRICES
Price Range One Year Ago
MEG Fibre Grade

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CFR Asia FEB USD/tonne +100 740.00-760.00 +90 740.00-740.00

 

PRODUCTION

China's overall polyester operating rate was at 83.1%, while the overall polyester sales to output ratio
was at 70-85%.

Specifically for PET bottle grade chips, the overall operating rate was at 76.3%, sales-to-output ratio was
at 80-90% and inventories stood at 6-12 days.

Bottle grade

In China, Jiangyin Chengxing Industrial Group shut its PET plant in second half April 2020 on technical
issues. The plan torestart was postponeddue to administrative delays. Zhejiang Wankai New
Materialsshut its 400,000 tonnes/yearplant for maintenance on 17 November 2020. The maintenance is
expected to take more than a few months, while there is no expected restart date. China Resources
Chemical shut its 400,000 tonnes/year capacity for a month-long maintenance that started in end-
December 2020. Dragon Special Resin will shut its PET plant for maintenance in January 2021 for two
weeks.

A plant in Taiwan has planned maintenance around mid-January that may stretch longer than one month.

India’s IVL Dhunseri started maintenance for one PET line on 5-6 December 2020 and postponed the
estimated restart date to end-January 2021. A force majeure was declared on 25 December 2020 as the
time for rectification of the plant issue is taking longer than the initially estimated.

South Korea’s TK Chemical is planning PET plant maintenance in February 2021 for three weeks.

OTHER REGIONS

In Europe, PET is tight due to heightened interest in domestic material, following delayed imports of PET
and raw materials. This, combined with increasing production costs, is creating a bullish environment.

ANALYTICS

PET resin and fibre market sentiments have been boosted by increasing crude oil prices and concentrated
restocking activity. The rise in crude has caused much speculative trading in the purified terephthalic acid
(PTA) market, resulting in bullish sentiment in the PET market. Meanwhile, restocking activity from end-
user industries in China has increased, taking into consideration potential logistic limitations due to the
abnormally cold winter and coronavirus outbreaks in some regions.

Demand from the Chinese textile industry has increased. The very cold winter in China this year has
increased demand for winter clothing, leading to a continuous drop in polyester fibre and textile
inventories.

PET resin and POY supply are expected to decrease during the winter. Due to the cold winter in China, the
country’s polyester production will keep decreasing because of power rationing caused by the shortage of

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coal.

PET bottle grade cargoes are expected to be in surplus in northeast Asia. India is planning to put
antidumping duties on Chinese cargoes, leaving Indian buyers to rely more on local producers. This
should increase available supply in northeast Asia.

By Jimmy Zhang (jimmy.zhang@icis.com)

For more information about analytical content, click here .

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