Insight Focus
PET and PTA Futures dropped sharply as Trump’s brokered ceasefire in the Middle East holds. Asian PET resin export prices also softened tracking feedstock costs lower. Forward curves remain in backwardation indicating potential future weakness in Asian PET export prices.
PTA Futures and Forward Curve
PTA Futures dropped sharply last weekly following the downwards correction in crude and upstream pricing after the Israel-Iran ceasefire.
With Brent crude oil prices back down to USD 67/bbl, oil traders are now judging that the risk of crude oil supply disruption in the Middle East has dissipated. OPEC+ are also expected to agree the addition of another 411,000 b/d to combined output at its next meeting on July 6, boosting global supply.
The PX-N CFR spread widened on the back of tighter fundamentals and improved demand, with the average weekly spread increasing by around USD 23/tonne.
A slight lowering in PTA operating rates gave some support to PTA fundamentals, leading to improvement in the PTA-PX CFR spread, which averaged USD 86/tonne, up USD 2/tonne on last week.
PTA currently shows little sign of inventory accumulation, with all eyes instead on downstream polyester operating rates as to signs of any potentially weakening demand through July.
The PTA forward curve remains backwardated through to the beginning of 2026, with the Sept’25 contract at a RMB 224/tonne discount to the current month’s contract, and Jan’26 with a RMB 398/tonne discount.
MEG Futures and Forward Curve
MEG Futures also experienced a significant downturn, with main month contracts down over 5% versus the previous week.
East China main port inventories also continued to shrink, falling by around 6.6% to 512,000 tonnes, the eighth consecutive week of declining volume on slow import arrivals.
However, with the Middle East hostilities eased deep-sea arrivals are expected to pick up again weakening MEG fundamentals in the face of lower downstream demand heading into July.
The MEG Futures forward curve kept flat with the Sept’25 contract having just a RMB 46/tonne premium over current month and the Jan’26 held a RMB 86/tonne discount.
PET Resin Export – Raw Material Spread and Forward Curve
Chinese PET resin export prices also corrected downwards after their spike the previous week, with an average of USD 800/tonne FOB China by Friday, down USD 20/tonne on the week.
The average weekly PET resin physical differential against raw material future costs improved to a weekly average of positive USD 28/tonne last week, up by around USD 4/tonne. By Friday, the daily differential was at positive USD 32/tonne. Keeping relatively range bound despite the recent volatility.
The raw material cost forward curve remained in backwardation, with Sept’25 at a USD 25/tonne discount over current month, and Jan’25 holding a USD 44/tonne discount.
PET Resin Futures and Forward Curve
PET Resin Futures also softened as main contract months dropped by an average of around 4.3% versus the previous week. The current main month fell to RMB 6012/tonne (USD 838/tonne), down around USD 28/tonne from last week (including FX adjustment).
The average weekly premium of the Sept’25 PET Futures over Sept’25 Raw Material Futures kept flat at USD 21/tonne, up USD 9/tonne. By Friday, the daily premium stood at USD 20/tonne.
The PET Resin Futures forward curve remains in backwardation. Sept’25 was at a RMB 84/tonne (USD 12/tonne) discount over the current month, while Jan’25 had RMB 188/tonne (USD 26/tonne) discount.
Concluding Thoughts
Chinese PET resin export prices have broadly tracked raw material cost over the last few weeks, with prices easing back down into the previous range of USD 790-810/tonne FOB.
Overall, PET resin fundamentals are little changed, and this is expressed by the relatively stable physical differential to the raw material futures.
The recent decrease in operating rates has also stabilised factory stock, which was slowly increasing a few weeks back amid surging freight costs.
Export demand remains relatively weak, however with reversals in the freight market perhaps producer may see a later summer uptick in demand, particularly if prices continue to fall.
For PET hedging enquiries, please contact the risk management desk at MKirby@czarnikow.com.
For research and analysis questions, please get in touch with GLamb@czarnikow.com.
