Insight Focus
Global PET supply is increasingly shaped by trade flows. China’s rapid capacity growth and exports are intensifying global competition, especially as weaker demand in regions like Europe adds pressure. While supply gains improve availability, freight, tariffs, and sustainability demands still complicate procurement and planning.
China’s PET Expansion Reshapes Global Trade
PET supply is becoming increasingly shaped by trade flows, as well as fluctuations in local demand. This is especially true in China, where we’re seeing rapid expansion, aggressive export activity, and changing economics. Safe to say, this is impacting the global market for both virgin and recycled PET.
Global PET dynamics are increasingly being driven by China’s structural shift from a largely domestic-focused market to a major export hub. Over the past five years, China has added significant PTA and PET resin capacity, lifting total PET capacity to more than 35–40 million tonnes per year, far exceeding domestic demand growth.
As a result, exports have surged. In 2025, China exported an estimated 5.5–6.5 million tonnes of PET resin, up sharply from around 3 million tonnes in 2020. This has firmly established China as the world’s largest PET exporter, accounting for roughly 35–40% of global traded volumes.
Key Export Destinations
Chinese PET exports are highly diversified, but several regions dominate:
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Latin America (20–25%): Brazil, Mexico, and Colombia are major buyers, drawn by competitive pricing versus US domestic supply.
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Southeast Asia (15–20%): Vietnam, Indonesia, and the Philippines rely on Chinese resin to supplement limited domestic production.
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Middle East & Africa (15–20%): Turkey, Egypt, and South Africa are key importers, with price-sensitive demand favouring Chinese cargoes.
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Europe (10–15%): Imports into the EU have risen, particularly into Southern and Eastern Europe, despite ongoing anti-dumping scrutiny.
This export surge has put sustained pressure on legacy producers in Europe and parts of Asia, where higher energy and operating costs limit competitiveness.
These competitive pricing dynamics mean Chinese PET typically trades at a USD 50–150/tonne discount to European spot prices, depending on freight and market conditions. Even after accounting for shipping costs, this gap has been sufficient to encourage arbitrage flows into distant markets, particularly during periods of weak regional demand.
Global Procurement Faces Growing Complexity
The balancing act that packaging producers have been juggling for a while continues. While increased supply from Asia is helping improve short-term material availability and pricing, volatile freight costs, tariffs, and fluctuating demand are keeping things unsteady. Add political uncertainty into the mix and you’ve got a confusing cocktail for PET procurement and planning.
Freight markets remain a key swing factor. Container rates between Asia and Europe or the US have fluctuated significantly over the past year, at times eroding the arbitrage advantage of Asian-origin material. At the same time, trade policy continues to influence buying strategies.
For example:
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The EU has periodically tightened scrutiny on low-priced imports.
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The US market remains more insulated due to domestic capacity and trade barriers.
This creates a procurement environment where buyers must continuously reassess landed costs rather than relying on regional benchmarks.
Recycled PET Trade Flows Tighten
Sustainability goals don’t make it any easier, either. Demand for recycled PET is still on the rise, driven by legislation and brand commitments, yet converters and brand owners continue to face challenges around food-grade material availability, quality consistency, and long-term supply security (as we discussed in last month’s blog post). Scope 3 reporting, Product Carbon Footprint calculations, and greater supply chain transparency all add to the demand… and the pressure.
While virgin PET trade flows have expanded, the recycled PET (rPET) market is evolving differently, shaped by regulatory demand and feedstock constraints.
China is not a major exporter of food-grade rPET resin, due to strong domestic demand and regulatory priorities around circularity. Instead, its role is more prominent in rPET flakes and intermediate materials, as well as polyester fibre recycling streams.
Exports of lower-grade recycled materials are directed primarily to South and Southeast Asia, where they are further processed.
Globally, food-grade rPET demand is growing at 8–10% annually, but supply remains constrained by limited collection and processing capacity. This has pushed rPET prices to consistent premiums of USD 200–400/tonne over virgin PET in many markets.
But sustainability requirements are now central to procurement decisions. Regulations such as the EU’s recycled content mandates and global brand commitments are accelerating demand for rPET, while also increasing scrutiny on supply chains. These factors are forcing buyers to secure longer-term supply agreements and diversify sourcing strategies, often blending regional and imported material.
Trade Flows to Remain the Dominant Driver
Global PET markets will continue to be shaped by China’s export strategy and the interplay between regional demand and trade policy. Chinese capacity additions are expected to continue, sustaining export pressure. Weak demand in Europe could further increase reliance on imports. And rPET markets will remain structurally tight, supporting price premiums.
For procurement teams, the implication is clear: PET sourcing is no longer a regional exercise but a global optimisation problem, where trade flows, freight economics, and sustainability constraints must all be managed simultaneously.
