PET Prices Remain Stable Amid Low Feedstock Costs and Reduced Demand

PET prices remained stable in the US, Germany, and Asia in early May 2024, influenced by low feedstock costs, volatile crude oil prices, and reduced demand. Prices held steady at USD 1232/MT in the US, with similar trends observed in Germany and Asia.

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Bijay Laxmi
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PET Prices Remain Stable Amid Low Feedstock Costs and Reduced Demand

PET Prices Remain Stable Amid Low Feedstock Costs and Reduced Demand

In early May 2024, Polyethylene terephthalate (PET) prices remained stable across the United States, Germany, and Asian Pacific nations. This stability was influenced by a combination of low feedstock costs, volatile crude oil prices, and reduced demand from key downstream industries.

Why this matters: The stability of PET prices hasimportant implications for the global economy, as it affects the production and pricing of various consumer goods, such as bottles and packaging materials. Furthermore, changes in PET prices can influence the overall inflation rate and consumer spending habits.

In the US market, PET prices held steady at USD 1232/MT. PET feedstock PTA remained consistent, while MEG prices saw a 2.2% decline. West Texas Intermediate crude oil prices were reported at USD 79.65 per barrel on May 3rd, 2024, marking a weekly decrease of USD 5.73/bbl but a yearly increase of USD 8.33/bbl.

Germany's PET market also experienced stability, primarily due to reduced demand from the downstream bottle and packaging industry and continued low-cost support from feedstock. While PET feedstock PTA remained steady, MEG prices increased by approximately 4% as a result of higher feedstock costs. The eurozone's April Purchasing Managers' Index (PMI) declined compared to March, continuing a three-month downward trend after reaching 46.6 in January.

In China, PET prices maintained stability, market, may, market, situation influenced by diminished demand and low feedstock costs. Crude oil prices fell during the festival period, leading to a subsequent decrease in PTA prices after the market reopened. Overall operational activity declined, and PET off-take from the downstream market decreased, with consumption relying on existing inventory.

Alpek's Q1 2024 report showed an increase in both production and revenue compared to the last quarter. Global PET reference margins improved slightly compared to the second half of 2023, remaining steady throughout the quarter and aligning closely with guidance figures. Asian integrated reference margins averaged USD 288 per ton for the quarter, a 1% increase quarter over quarter (QoQ), while average Chinese reference margins stood at USD 154 per ton, reflecting a 1% decrease QoQ.

U.S. average reference Paraxylene prices rose by 5% QoQ to an average of USD 1,293 per ton. The spread between North American and Asian prices increased by 28% on a quarterly basis, averaging USD 230 per ton, yet remained 13% below the year-over-year (YoY) spread.

The in PET prices across major global markets in early May 2024 can be attributed to the interplay of low feedstock costs, volatile crude oil prices, and reduced demand from downstream industries. As the global economy continues to navigate the challenges posed by the ongoing pandemic recovery, the PET market's performance will remain closely tied to the dynamics of its key influencing factors.

Key Takeaways

  • PET prices remained stable in the US, Germany, and Asia in early May 2024.
  • Low feedstock costs, volatile crude oil prices, and reduced demand influenced stability.
  • US PET prices held steady at USD 1232/MT, while Germany and Asia saw similar stability.
  • Alpek's Q1 2024 report showed increased production and revenue, with improved PET reference margins.
  • PET market performance is tied to feedstock costs, crude oil prices, and downstream demand.