Insight Focus
PET and PTA futures face further declines, led by crude weakness. Chinese PET resin export prices come under renewed pressure, hitting a four-month low. Operating rates and inventories have stabilised, but price direction will be determined by crude in Q4.
PTA Futures and Forward Curve
PTA futures fell sharply on Friday following a string of bearish crude oil supply signals, with main month PTA contracts down between 2.25-3.75%.
Brent crude oil prices dropped to around USD 65/bbl, down nearly 4% versus the previous week. Traders digested the news that OPEC+ could hike output in October, a surprise inventory build in the US, and growing expectations for looser monetary policy from the Federal Reserve.
The PX-N CFR spread continued to narrow as PX fundamentals weakened on supply pressure. PTA faired better with the PTA-PX CFR average weekly spread relatively stable.
Increased net PTA production from plant restarts was broadly offset by rising polyester operating rates and other plant shutdowns.
Looking forward, PTA margins will continue to see support during this maintenance period, and seasonal downstream demand in the run up to October. However, the PTA supply-demand balance is expected to weaken again in Q4 as both drivers reverse, and stocks accumulate.
The PTA forward curve has gradually steepened in contango. The Jan’26 contract has a RMB 118/tonne premium to the current month’s contract, and Mar’26 holds a RMB 156/tonne premium.
MEG Futures and Forward Curve
MEG Futures once again were muted in response, with relatively little movement in near-term contracts, further out Jan’26 and Mar’26 dropped between 2-3%.
East China main port inventories dropped rapidly entering September, down nearly 18% to just 391,000 tonnes, on limited arrivals and higher offtake. Expectations are for stocks to continue to decline further through the first half of September.
Improved demand from increasing polyester operating rates, ahead of the Chinese National Day holiday at the end of the month, is likely to result in modest destocking. Scheduled maintenance at several domestic producers is also expected to tighten MEG fundamentals.
The MEG Futures forward curve kept flattened, losing all previous forward premium, with Jan’26 now holding a RMB 42/tonne discount over the current month, and Mar’26 holding a RMB 37/tonne discount.
PET Resin Export – Raw Material Spread and Forward Curve
Chinese PET resin export prices fell to an average of USD 765/tonne by Friday, down USD 15/tonne versus the previous week. Offers as low as USD 760/tonne are also being reported.
The average weekly PET resin physical differential against raw material future costs increased USD 6/tonne to USD 6/tonne last week. By Friday, the daily differential had risen steeply to positive USD 14/tonne due to the sharp fall in raw materials values on Friday.
The raw material cost forward curve held steady with a small forward premium, Jan’26 at a USD 7/tonne premium with current month, and May’26 holding just a USD 12/tonne premium.
PET Resin Futures and Forward Curve
PET Resin futures also weakened with the next main month contract, Jan’26, down by 1.65% versus the previous week.
The current main month also decreased to RMB 5,794/tonne (USD 813/tonne), down by USD 5/tonne from last week (including FX adjustment).
The average weekly premium of the Sept’25 PET Futures over Sept’25 Raw Material futures rebounded after last week’s sharp decline to USD 46/tonne, up USD 8/tonne. By Friday, the daily premium had collapsed back to USD 37/tonne.
The PET Resin futures forward curve remained in slight contango, flattening slightly versus last week. Jan’26 was at a RMB 60/tonne (USD 8/tonne) premium over the current month. Mar’26 had a RMB 98/tonne (USD 14/tonne) premium.
Concluding Thoughts
Having been steadily on the decline over the last month, Chinese PET resin export differentials versus raw materials look to be steadying.
Although operating rates are still reduced, they have stabilised. Inventory has fallen back slightly to a healthy level of around 16 days. Resin export prices are likely to closely track raw material costs over the coming months.
However, with resin demand moving into the offseason, any increase in supply may compress profitability further. Around 600,000 tonnes/year of new capacity is also expected to be brought online in September, although this may face delays.
With PET resin and raw material forward curves only showing a slight premium through to Q1’2026, pricing will ultimately lie in the fate of the oil markets, which will undoubtedly remain uncertain and volatile.
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.
