Insight Focus
PTA futures tracked crude prices higher, with a slight improvement in fundamentals. PET resin futures continue to hold a USD 25-30/tonne premium over the next six months. Asian PET resin spot export prices remain relatively steady, at the mercy of near-term macro-events.
PTA Futures and Forward Curve
PTA futures gained around 1% last week largely tracking upstream costs, supported by modest improvement in market fundamentals.
Brent crude oil prices ended last week up 1% at just over USD 73/bbl following choppy trading around the US election. By Friday, oil prices had retreated as fears of damage on oil and gas infrastructure in the US Gulf by Hurricane Rafael receded, and concerns about weakening demand in China were back in focus.
PX fundamentals remained weak. The PX-N spread continued to shrink, narrowing by a further USD 10/tonne last week. Meanwhile, the weekly average PTA-PX CFR spread improved, increasing to around USD 80/tonne.
PTA plant operating rates stayed relatively stable, having trended upwards since the end of August into ‘peak season,’ supported by increasing polyester production. Slight easing of inventories also supported PTA fundamentals.
The PTA forward curve kept a slight contango, with the Jan’25 premium at RMB 46/tonne over the current month’s contract. May’25 held a RMB 140/tonne premium.
MEG Futures and Forward Curve
MEG futures continued to rebound strongly from their dip at the end of October, with main contract months up by 1-2% last week.
This comes despite East China main port inventories increasing by around 6.8% to 612,000 tonnes, with low but stable offtake.
MEG fundamentals remained relatively stable and are expected to remain so through November. Whilst overseas demand has increased, deep sea cargoes from the US are expected to recover through to year end.
Additionally, higher MEG prices are driving added domestic coal-based production, potentially giving way to a weaker supply-demand balance on the near-term horizon.
The MEG Futures forward curve was flat-to-slight carry, with only a modest upward curve through the next 12-months. The Jan’25 contract held a RMB 65/tonne premium over the current month. The May’25 contract held a RMB 158/tonne premium.
PET Resin Export – Raw Material Spread and Forward Curve
Chinese PET resin export priceFurther out, the new Trump administration finds itself in a dominant position with regards to both the war in Ukraine and the Middle East. A solution to either, or both, could sink crude prices and bring about a return to Red Sea container passage.s ended last week relatively flat versus the previous week’s close, with an average price of USD 825/tonne by Friday.
The average weekly PET resin physical differential against raw material future costs kept flat at negative USD 19/tonne last week. By Friday, the daily differential was negative USD 20/tonne, again showing no improvement on the previous week.
The raw material cost forward curve has kept a slight contango through 2025. Jan’25 holds a USD 9/tonne premium over the current month. The premium for May’25 was USD 25/tonne and Sept’25 USD 33/tonne.
***NEW PET Resin Futures and Forward Curve
PET Resin Futures gained by just over 0.5% with the Mar’25 contract — the first contract month of these new futures — increasing to RMB 6,288/tonne (although down USD 3/tonne on FX to a USD 874/tonne equivalent) by Friday.
The average weekly premium over Raw Material Futures kept relatively flat at USD 22/tonne. By Friday, the daily premium was USD 21/tonne, continuing to keep within a tight range.
The PET Resin Futures forward curve remains in slight contango with May’25 showing a USD 4/tonne premium and Sept’25 a USD 19/tonne premium, over the main Mar’25 contract.
For PET hedging enquiries, please contact the risk management desk at MKirby@czarnikow.com.
Concluding Thoughts
Despite all the potential volatility surrounding the US election, markets remained relatively calm overall with minimal short-term impact across the polyester value chain last week.
The PET resin physical differential over raw material futures remains in the doldrums, with PET resin export prices facing ebbing back and forth on upstream crude movements.
In the near-term, focus is likely to pivot towards China’s economic health to support crude demand, with OPEC+ moving to prop up prices.
Further out, the new Trump administration finds itself in a dominant position with regards to both the war in Ukraine and the Middle East. A solution to either, or both, could sink crude prices and bring about a return to Red Sea container passage.
In the meantime, Asian PET resin export prices look to keep rangebound.
For research and analysis questions, please get in touch with GLamb@czarnikow.com.
