PET Raw Material Futures Outlook: Dragged Down by Crude’s Collapse

Insight Focus

  • Chinese PTA and MEG closed lower for the week, dragged down by crude’s collapse.
  • Whilst Chinese PET resin export prices have eased, the premium over feedstock futures has widened.
  • PET raw material costs should remain rangebound in near term.


PTA Futures and Forward Curve

  • The PTA futures market closed lower for the week on Friday.
  • This was primarily driven by crude oil’s sharp drop.
  • The PTA 12-month forward curve is backwardated, once again, with future months trading at a discount to the April contract.
  • Improved supply and demand may add support inthe short term.


MEG Futures and Forward Curve

  • MEG futures receded, tracking the fall in crude oil.
  • The forward curve is now in contango with future contracts trading at a premium to April levels.
  • High inventory levels may limit upward pressure in short-term.


PET Resin Export – Raw Material Spread and Forward Curve

  • With China’s PET resin export prices closing the week at 1,210 USD/tonne, the current premium over feedstock futures has widened to 143 USD/tonne.
  • The PET export-raw material forward curve is flat.
  • Current spot offers for June shipment are around 1,230 USD/tonne FOB, having dipped to 1,200 USD/tonne mid-week.


Concluding Thoughts

  • Crude oil should remain volatile in the near term, with PTA and MEG futures reacting accordingly.
  • Record orders for Chinese PET resin over the last six months will continue to support the high premiums over feedstock for the reminder of H1’22 due to lack of availability.
  • Premiums may even widen slightly with peak demand in April/May, lending support to current indications for June shipment.


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Gareth Lamb

Gareth joined Czarnikow in 2021 and is Czarnikow’s PET analyst and recycling specialist. As well as regularly reporting on key market trends and dynamics, Gareth is also developing new research products and analytics within the PET and rPET space. Prior to joining Czarnikow, Gareth led Wood Mackenzie’s PET research service and was Senior Consultant at IHS Markit, working within the petrochemical consulting team. Dr. Lamb graduated from the University of St Andrews with a PhD in organometallic chemistry; and has a masters of Chemistry degree from the University of Liverpool.

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