East China PET bottle-grade chip prices to fall further

22 March 2012 08:57  [Source: ICIS news]

SINGAPORE (ICIS)--The spot prices of polyethylene terephthalate (PET) bottle-grade chips in east China may continue to fall because of a decrease in feedstock costs and weak downstream demand, industry sources said on Thursday.

The prices of bottle-grade chips were assessed at yuan (CNY) 11,500-11,600/tonne ($1,820-1,835/tonne) DEL (delivered) east China on 22 March, compared with CNY11,950-12,050/tonne on 2 March, according to Chemease, an ICIS service in China.

“We lowered our offer accordingly because the prices of pure terephthalic acid [PTA] and monoethylene glycol [MEG], both feedstocks of PET bottle-grade chips, decreased by a lot in this month,” a producer in east China said.

The feedstock prices had fallen because of weak demand, the producer added.

PTA spot prices were assessed at CNY8,480-8,520/tonne CIF (cost, insurance & freight) east China on 20 March, compared with CNY9,000-9,050/tonne on 1 March, Chemease data showed.

MEG spot prices were assessed at CNY7,330-7,370/tonne ex-tank east China on 20 March, compared with CNY8,170-8,200/tonne on 1 March, the data showed.

“If the feedstock prices continue to fall in the next few days, the price of bottle-grade PET will fall accordingly,” a trader in east China said.

In addition, the spot prices of bottle-grade chips are expected to drop further on weak demand from the downstream beverage bottle sector, because of the prolonged cold weather in much of China, said a market player in east China.

Downstream demand traditionally picks up in March as the weather turns warm because beverage bottle producers resume production in anticipation of higher demand in summer, added the player.

PET is used to make plastic bottles and polyester fibre.

($1 = CNY6.32)

By: Thompson Qian

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