Insight Focus

  • Improved PTA fundamentals helps futures weather downturn in crude prices.
  • PET resin export prices end week flat, buyers resistant to chasing prices higher.
  • Whilst sales volumes expected to lift, margins look constrained by future supply additions.

PTA Futures and Forward Curve

  • PTA futures closed relatively flat versus the previous week, despite declining through the back-half of last week, as crude prices experienced their largest weekly loss since early February.
  • Friday’s US jobs report is likely to provide additional direction to crude and upstream pricing, from which PTA futures may take their cue come Monday.
  • However, several PX and PTA producers have entered turnarounds. With PTA operating rates declining over the past week, and high downstream polyester operating rates, spot liquidity tightened.
  • Whilst supply/demand fundamentals have improved, margin is expected to stimulate higher PTA operating rates; new PTA capacity will also allow for ample supply.
  • PTA forward curve remains slightly backwardated, with the May’23 now at a RMB 62/tonne discount to the current month’s contract.

MEG Futures and Forward Curve

  • MEG Futures declined sharply through the later part of the week, with supply still exceeding demand MEG prices were fully exposed to the fall in crude.
  • East China main port inventories fell again last week, for a second week running. Although down a further 1.8%, port inventories remained high at 1.037 MMt.
  • However, with such poor margins further production cuts at Chinese MEG producers are expected, with Chinese coal-based producers entering turnaround season in March.
  • Higher domestic polyester operating rates may lend support to MEG demand. However, recent start-ups and upcoming plants continue to weigh on sentiment.
  • The MEG futures forward curve remains in contango, rising through the later part of the year, although the May’23 contract is on-par with the current month’s contract.

PET Resin Export – Raw Material Spread and Forward Curve

  • Chinese PET resin export prices were once again at a standstill, averaging USD 975/tonne last Friday.
  • The weekly average PET resin physical differential to feedstock costs saw a modest increase of around USD 5/tonne to average USD 63/tonne for the week. By Friday, the daily spread was just USD 65/tonne.
  • The PET resin raw material forward curve moved into contango last week. At Friday’s close, the May’23 contract trading at a USD 8/tonne discount to the current month’s contract.

Concluding Thoughts

  • Despite the small weekly increase, the physical differential between PET export prices and raw material futures remains constrained.
  • Although both domestic and export PET resin demand has shown improved in recent weeks, with buyers and traders working/selling off stocks purchased at lower levels before the Spring Festival.
  • As a result, there is little enthusiasm to chase prices higher.
  • In terms of volume, export orders are reported to be at good levels and are expected to improve into key regions in the run up to peak season.
  • Tighter Indian export availability has also boosted demand for Chinese resin into the Middle East and other markets.
  • However, European buyers and traders are moving away from Chinese resin due to an increased risk of a potential anti-dumping case against Chinese producers being opened in Q2’23.
  • The market now plays a waiting game ahead of new Q2’23 capacity additions; margins are projected to remain relatively rangebound through March.

For PET hedging enquiries, please contact the risk management desk at

For research and analysis questions, please get in touch with

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.

More from this author