PET Resin Market Meets Bearish Price Trend Under Demand Downturn

The market for Polyethylene Terephthalate (PET) Resin Bottle Grade in Europe continued to see a downward trend, with prices largely flat in the first week of June 2023, while the US market was also having trouble with a sufficient supply, and PET Resin prices remained unchanged. The decrease in market activity in both regions can be attributed to lackluster high-season demand from downstream industries, lower costs of raw materials, and unfavorable weather conditions that have not stimulated seasonal demand as expected.

Meanwhile, the decline in Crude Oil prices had a negative impact on its derivative market, causing a 3% drop in feedstock Paraxylene prices. However, the prices of another feedstock, Purified Terephthalic Acid (PTA), remained steady. As a result, the production cost of PET Resin decreased slightly. Nevertheless, market sources noted that increasing prices was difficult due to additional inventory build-up and limited interest from buyers. According to the ChemAnalyst database, the FAS Houston price for PET Resin Bottle Grade stabilized during the week ending 2nd June 2023 after witnessing a 6.8% drop during the previous week.

In the US market, purchasing activity from downstream packaging industries appears uncertain alongside an abundant supply of PET Resin via railcars. Despite this, production in the region is running at full capacity as plants are stocking up in anticipation of the upcoming hurricane season.

In Europe, Sellers noted that customers avoided replenishing inventories and only procured material when needed. However, the stability in the PET Resin contract price indicated that consumption has still been low in Europe and around the world due to the macroeconomic environment. Although there has been a minor recovery for PET Resin goods in comparison to other polymers, overall demand is still weaker. Nevertheless, demand is still less than what was anticipated for the summer.

Currently, downstream demand for PET Resin has deteriorated more than what was expected. Because of this, several PET Resin customers have put off their purchasing decisions to gain a clearer understanding of their volume requirements.

According to the Analyst, the decreasing trend in the PET Resin market is projected to continue in the next weeks, with more drops possible since the region's inventory is more than sufficient to meet the approaching season demand. Additionally, seasonal demand is projected to increase in the upcoming weeks. However, United States manufacturers need to be cautious of the approaching hurricane season, which could disrupt production activities in the US market.