China recycled polyethylene terephthalate (R-PET) prices remained flat despite an uptrend in virgin PET prices because of persistently weak demand in downstream recycled polyester staple fibres (PSF) sector with the situation unlikely to change in the coming few months, market sources said on 12 June.
The assessed prices of clear/white hot-washed R-PET flakes were stable for nine consecutive weeks at $800-850/tonne CFR (cost & freight) China since early April to the week ended 10 June, according to ICIS data.
Chinese market participants said the jump in virgin polyethylene terephthalate (PET) semi-dull fibre grade chips and its feedstocks purified terephthalic acid (PTA) and monoethylene glycol (MEG) in recent weeks is having no impact on the R-PET market as downstream demand was too weak for any price increase of R-PET.
Spot prices of semi-dull fibre-grade PET chips increased $50-70/tonne week on week to $1,230-1,260/tonne CFR NE (northeast) Asia for the week ended 6 June on the back of higher offers because of price increases in feedstock PTA and MEG.
Virgin PET feedstock PTA and MEG spot prices were at $927-932/tonne CFR CMP, up $30-31/tonne, and $963-980/tonne CFR CMP, up $41-43/tonne, respectively in the same period.
Although many market participants have said that R-PET demand typically improves starting in August/September, some market participants were not optimistic about the market outlook for R-PET demand for the rest of the year given the persistent weak demand since the start of the year.
“I think that the demand will be flat for the rest of the year,” a northeast Asian producer said.
Chinese buyers were not keen on purchasing imported R-PET as prices of domestic material were competitively priced and domestic supply was ample.
“I still have sufficient inventory as downstream sales condition is flat and I am able to get domestic material at lower prices than import material when I need to replenish my stock”, a Chinese buyer said in Mandarin.
Some Chinese buyers said they are getting material at non-market rates from recycling plants that they have invested in. This situation further reduces spot trade and discussion for import material.
A northeast Asian trader said its offers to the China market have received very limited buying interest since the start of the year and it has been looking at other countries for trading opportunities.