Insight Focus
PTA and PET futures rallied on surging crude values due to the Israel-Iran conflict. Asian PET producers responded quickly to rising feedstock costs with higher resin offer prices. PET and Raw Material Forward curves remain in backwardation although discounts have fallen.
PTA Futures and Forward Curve
PTA Futures surged on rising crude values in the wake of the Israeli strikes on Iran, with the Sept’25 main month contract up by nearly 2.5%.
Brent crude surged more than 8% on Friday to above USD 75/bbl after Iran launched a wave of missile strikes on Israel in retaliation for the Israeli Air Force’s targeted assault on Iranian nuclear and military infrastructure. Brent crude prices opened above USD 77/bbl on Sunday as both sides targeted critical energy infrastructure.
The PX-N CFR spread narrowed, with PX lacking demand support, with the average weekly spread decreasing by around USD 28/tonne to average around USD 217/tonne.
However, the PTA-PX CFR spread strengthened, averaging USD 88/tonne, up USD 8/tonne on last week, although rising PTA production versus declining downstream polyester operating rates indicate a weakening future basis.
The PTA forward curve remained backwardated although the curve flattened somewhat, with the Sept’25 contract at a RMB 92/tonne discount to the current month’s contract, and Jan’26 with a RMB 188/tonne discount, both around half that seen the previous week.
MEG Futures and Forward Curve
MEG Futures also rallied although far more sluggishly than PTA and PET values, as slower downstream demand weighed on the market.
East China main port inventories continued to shrink, down around 4.5% to 564,000 tonnes on Friday. Daily offtake also decreased markedly on poor downstream demand.
However, import arrivals are expected to increase and the restart of Hengli’s MEG facility is expected to add supply pressure moving MEG fundamentals from destocking into a more balanced situation in July.
The MEG futures forward curve has now move into slight contango, although main month contracts from Sept’25 onwards are effectively flat, reflecting current market uncertainty. The Sept’25 contract held a RMB 81/tonne premium over current month and the Jan’26 held a RMB 86/tonne premium.
PET Resin Export – Raw Material Spread and Forward Curve
Chinese PET resin export prices also firmed on higher feedstock costs, with an average of USD 800/tonne FOB China by Friday, up USD 20/tonne on the week.
The average weekly PET resin physical differential against raw material future costs remained flat with a weekly average of positive USD 27/tonne last week. By Friday, the daily differential was at positive USD 28/tonne.
The raw material cost forward curve remained in backwardation, although the steepness in the curve eased markedly, with Sept’25 at a USD 7/tonne discount over current month, and Jan’25 holding an increased USD 18/tonne discount.
PET Resin Futures and Forward Curve
PET Resin Futures also increased as main contract months leapt by an average of around 2-3% versus the previous week.
The current main month fell to RMB 6,056/tonne (USD 843/tonne), up around USD 21/tonne from last week (including the FX adjustment).
The average weekly premium of the Sept’25 PET Futures over Sept’25 Raw Material Futures kept relatively flat at USD 22/tonne, down just USD 1/tonne. By Friday, the daily premium stood at USD 21/tonne.
The PET Resin Futures forward curve remains in backwardation. Sept’25 was at a RMB 86/tonne (USD 12/tonne) discount over the current month, while Jan’25 had RMB 152/tonne (USD 21/tonne) discount.
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.
