Asian PET Prices Struggle to Match Sharp Rise in Feedstock Costs

Asian PET bottle markets have remained relatively stable to slightly firmer since mid-July, but the increase in PET prices has been far smaller than the sharp rise in upstream costs. Weak demand across the region continues to limit producers’ ability to pass higher production costs on to buyers.

In China, average FOB PET bottle prices were around $840/ton before the earlier market rally, later reaching a four-year high of $1220/ton in May. Prices then corrected to $975/ton by the second week of July before recovering to approximately $1010/ton in mid-July. Since then, FOB China prices have remained around this level for four consecutive weeks.

Southeast Asia followed a similar pattern. Average CIF SEA PET bottle prices climbed from around $890/ton in late February to a four-year peak of $1305/ton in May. Following the subsequent correction, prices fell to $1070/ton by the second week of July and have since remained broadly stable, standing at around $1075/ton last week.

The contrast between PET prices and feedstock costs has become increasingly significant. CFR China MEG prices surged from $520/ton in the second week of July to $680/ton last week, a rise of 31% in just five weeks and the highest level since March 2022. CFR China PTA prices also increased from $770/ton to $825/ton during the same period, marking a 7% gain. Despite these higher costs, PET producers have been unable to raise prices at a similar pace.

Demand remains the biggest obstacle to a stronger PET market. In China, converters continue to purchase cautiously and mainly cover immediate requirements rather than build inventories. Weak end-user consumption has reduced buying interest, while export markets have also remained highly price-sensitive. This has made it difficult for Chinese suppliers to implement substantial increases despite the sharp rise in production costs.

Buying activity in Southeast Asia has followed a similar pattern. Converters remain cautious due to limited improvement in downstream demand and generally prefer to wait for clearer market direction before committing to larger volumes. Higher PET prices have also discouraged aggressive restocking, keeping sellers’ room for further increases restricted.

Supply management has provided some support to the market, with Chinese producers adjusting operating rates amid weaker margins and sluggish demand. These production measures have helped prevent excessive supply from building up, allowing sellers to defend current price levels. However, reduced output has not been enough to create a strong upward movement without a corresponding improvement in consumption.

Overall, the Asian PET market remains caught between sharply rising feedstock costs and weak demand. Higher MEG and PTA values are strengthening the cost base and helping producers resist price reductions, but cautious buying continues to prevent the full impact of rising production costs from being reflected in PET bottle prices.

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