Insight Focus
PTA and MEG Futures have softened as downstream production cuts weaken buying sentiment. Chinese PET resin export prices have fallen as high freight rates hit export demand. Forward curves indicate continued downward pressure on Asian PET resin export prices in H2’25.
PTA Futures and Forward Curve
PTA Futures softened last week, with main month contracts easing by just under 1%, continuing their downward trajectory following the tariff pause rebound mid-May.
Crude oil prices posted a gain last week, mostly on renewed optimism about US-China trade negotiations but also on supply uncertainty in Venezuela and Iran. At the time of writing, Brent crude was trading at USD 65.20/bbl, up from USD 64/bbl a week earlier.
The PX-N CFR spread decreased as plant restarts and higher operating rates led to a worsening of the supply-demand balance and buying sentiment softened, with the average weekly spread decreasing by around USD 10/tonne to average around USD 245/tonne.
The PTA-PX CFR spread also softened, averaging USD 80/tonne, down USD 3/tonne on last week, as PTA restarts and a slight easing in downstream polyester production added supply pressure.
The PTA forward curve remained backwardated with the Sept’25 contract at a RMB 238/tonne discount to the current month’s contract, and Jan’26 held a RMB 366/tonne discount.
MEG Futures and Forward Curve
MEG Futures experienced more bearish sentiment with current month contract dropping by over 2.5% versus the previous week’s close, as sluggish demand weighed on the market.
This comes despite East China main port inventories shrinking further by around 2.9% to 590,000 tonnes, the fifth consecutive week of easing volumes.
MEG supply and demand fundamentals remained relatively unchanged, although several large plant restarts are scheduled over the coming weeks, coupled with weakening demand from easing polyester operating rates.
Moving into the new contract month, the MEG futures forward curve has now really flattened out considering recent near-term declines. The Sept’25 contract held a RMB 21/tonne discount over the current month and the Jan’26 held a RMB 139/tonne discount.
PET Resin Export – Raw Material Spread and Forward Curve
Chinese PET resin export prices began to ease again last week, with an average of USD 780/tonne FOB China by Friday, down USD 10/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 25/tonne.
The raw material cost forward curve remained in backwardation, with Sept’25 at a USD 29/tonne discount over the current month, and Jan’25 holding an increased USD 45/tonne discount.
PET Resin Futures and Forward Curve
PET Resin Futures also softened as main contract months dropped by an average of around 1.5% versus the previous week.
The current main month fell to RMB 5,910/tonne (USD 822/tonne), down around USD 11/tonne from last week (including the FX adjustment).
The average weekly premium of the Sept’25 PET Futures over Sept’25 Raw Material Futures increased to USD 32/tonne, up USD 9/tonne. By Friday, the daily premium stood at USD 24/tonne.
The PET Resin Futures forward curve remains in backwardation. Sept’25 was at a RMB 34/tonne (USD 4/tonne) discount over the current month. Jan’25 had RMB 132/tonne (USD 18/tonne) discount.
Concluding Thoughts
High freight rates continue to pressure export demand out of Asia. In response, some Chinese producers have moved lines into maintenance. For instance, Sanfame has shut down several lines with a total of 1.8 million tonnes of capacity since the end of May.
As a result, the physical differential remains relatively robust, although downward pressure is undoubtedly building. Factory stock levels, whilst currently relatively healthy have been increasing.
Even if freight rates begin to normalise later in 2025, the raw material forward currently shows a USD 45/tonne discount through to Jan’26, indicating that PET resin export prices are also likely to come under pressure through to next year.
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.
