Insight Focus
PET and PTA futures have softened slightly as upstream costs remain relatively stable. The EIA forecast Brent crude oil will fall to USD 59/barrel on average in the fourth quarter and increased its bearish outlook. PET resin demand is also expected to weaken and further production cuts are likely to reduce producer losses in Q4.
PTA Futures and Forward Curve
PTA futures steadied themselves last week, with main contract months moving by less than 0.3% average.
By Friday Brent crude oil prices were up around USD 1/bbl versus the previous week, to around USD 67/bbl. Weekly gains were bolstered by renewed geopolitical tensions, a bullish US inventory report, and monetary easing by the Federal Reserve.
The intensifying conflict between Ukraine and Russia also drove bullish sentiment. But gains have been tempered by persistent concerns around US economic softness and signs of weak fuel demand.
The PX-N CFR spread continued to narrow as PX fundamentals weakened on supply pressure. The PTA supply-demand balance showed slight improvement as PTA operating rates slowed and downstream polyester production increased. The PTA-PX CFR spread improved USD 3/tonne to USD 78/tonne.
Looking forward, PTA margins look set to remain stable, moving with cost. However, the PTA supply-demand balance is expected to weaken again in Q4 as downstream markets reach their seasonal low and PTA stocks accumulate.
The PTA forward curve premium has reduced marginally over the last week. The Nov’25 contract has a RMB 18/tonne premium to the current month’s contract, and Jan’26 has a RMB 36/tonne premium.
MEG Futures and Forward Curve
After weeks of tracking within a relatively tight range, MEG Futures came under renewed pressure last week with the next main contract month of Nov’25 dropping by over 0.5% versus the previous week.
East China main port inventories ebbed back-and-forth last week, ending down by around 1% to just 400,000 tonnes, on limited arrivals. Traders continued to avoid long positions.
Looking past the upcoming National Day holiday, inventories are expected to build on new domestic MEG capacity and slower downstream demand, keeping pressure on prices.
The MEG Futures forward curve broadly kept shape, with Nov’25 holding a RMB 91/tonne discount over the current month, and Jan’26 holding a RMB 79/tonne discount.
PET Resin Export – Raw Material Spread and Forward Curve
Chinese PET resin export prices kept relatively steady at USD 765/tonne by Friday, up by USD 5/tonne versus the previous week’s close.
The average weekly PET resin physical differential against raw material future costs decreased USD 7/tonne to an average of just USD 2/tonne last week. By Friday, the daily differential had jumped to positive USD 7/tonne bucking the trend for the week, and likely to contract back down to range.
The raw material cost forward curve held steady with a small forward premium, with Jan’26 at a USD 4/tonne premium with current month, and May’26 holding a USD 10/tonne premium.
PET Resin Futures and Forward Curve
PET Resin futures also softened slightly, by less than half a percent, with the next main month contract, Nov’25, down less than 0.1% versus the previous week.
The current main month increased slightly to RMB 5,812/tonne (USD 817/tonne), up by USD 1/tonne from last week (including FX adjustment).
The average weekly premium of the Nov’25 PET futures over Nov’25 Raw Material futures improved to USD 59/tonne, up USD 3/tonne. By Friday, the daily premium was USD 59/tonne.
The PET Resin futures forward curve has flattened over the next three to four months of contract with greatest liquidity. Nov’25 was at a RMB 18/tonne (USD 3/tonne) discount over the current month, while Jan’26 had RMB 10/tonne (USD 1/tonne) discount.
Concluding Thoughts
Chinese PET resin producers experienced strong order flow last week, and buyers seized upon low prices and restocked ahead of Golden Week.
Even with the added demand, producers could only keep the physical differential from falling further. Beyond Golden Week, demand will see the combined threat: lack of seasonal uplift from the textile segment and a rigid demand for bottle resin now deep into its offseason.
PET resin producers remain close to cost level, and without stronger orders, some plants are considering going further with production cuts to reduce losses.
With producer margins already squeezed, future direction of PET resin pricing will in large be driven by crude oil, which is also being pulled in different directions. Recent updates from the EIA and IEA both express bearish outlooks with significant inventory builds in Q4.
The EIA’s latest Short-Term Energy Outlook in September Global projects that Brent crude oil price will decline significantly in the coming months, falling from around USD 67/bbl to “USD 59/bbl on average in the fourth quarter of 2025 (4Q25) and around USD 50/bbl in early 2026.”
If crude oil prices experience a sharp downwards correction in Q4, expect PET resin pricing to follow suit.
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.
