China PET chips rise $40/tonne on peak demand

01 April 2008 04:51  [Source: ICIS news]

SINGAPORE (ICIS news)--Polyethylene terephthalate (PET) values in Asia have been steadily rising for the past one month and recorded a nearly 3% hike for the last week of March with Chinese PET bottle chips prices increasing $40/tonne on strengthening seasonal demand, producers and traders said on Tuesday.

Deals for PET bottle chips from China were pegged at $1,370-1,410/tonne FOB (free on board) China for the week ending 28 March from the previous week’s level of $1,330-1,370/tonne FOB China, according to global chemical markets intelligence service ICIS pricing.

"We’ve had pretty good sales so far. Half of our April cargoes have been taken up and we’re contemplating increasing our offers to $1,450/tonne FOB Korea for the rest of April," said an executive from South Korea’s largest PET bottle chip maker, KP Chemical.

KP Chemical concluded various deals between $1,410-1,430/tonne FOB Korea for the last week of March, according to market sources.

While enjoying the biggest gains in Asia, Chinese PET chip sellers were upbeat that the end of the traditional peak season in May would not result in a sales downturn as the Beijing Olympics were due in August.

"According to our estimates, the Olympic games will trigger an additional 10% growth in PET bottle chip demand in 2008. This is on top [of] the usual 10-20% increase in China’s annual PET bottle chip consumption," said an executive from Far Eastern Textile's Shanghai office, in Mandarin.

The Taiwanese PET bottle chip producer has two PET facilities in Shanghai and Suzhou in eastern China with a combined annual capacity of 340,000 tonnes.

PET fibre chips would also enjoy stronger growth in China on the back of demand for consumer goods during the world’s largest athletics event.

"The fibre chips will go into the stuffed toys, cushions and other souvenirs produced in line with the Beijing Olympics. The consumers for these items will fuel the demand for PET fibre chips indirectly," said a source from PetroChina in Mandarin.

Further fuelling PET price hikes was a firming trend for feedstock purified terephthalic acid (PTA) over the past week.

PTA spot values firmed to $995/tonne CFR (cost and freight) CMP (China main port) on the back of deals done on Friday, according to ICIS pricing.

PET bottle chips are used to manufacture bottles for consumer goods such as drinking water and cooking oil while PET fibre chips are utilised to make polyester fibres used for stuffing toys and cushions.

Major PET producers in Asia include Reliance, SK Chemicals and Indorama

By: Hong Chou Hui
+65 6780 4359

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