BOPET Film Prices Decline in European and Asian Markets Amidst Weak Demand
- 28-Aug-2023 5:43 PM
- Journalist: Patricia Jose Perez
During the penultimate week of August 2023, the Biaxially-Oriented Polyethylene Terephthalate (BOPET) Film market witnessed a noticeable price dip in the European and Asian regions. The decrease in BOPET Film price in the European market, approximately 1%, was attributed to the ongoing struggles within the feedstock PET industry. Pressured by weakening demand, prominent producers decided to curtail production rates and trim stockpiles to safeguard their profit margins. However, this endeavor to prevent losses did not translate into immediate success, as merchants grappled with an oversupply inventory.
This imbalance in BOPET Film supply and demand is underpinned by a confluence of factors, including subdued seasonal demand and consumer preferences favoring imported goods. Curiously, even some beverage companies had to recalibrate their pricing strategies due to these demand irregularities, indicating that the market's typical seasonal patterns have been disrupted.
On a positive note, the recent decrease in upstream Crude Oil prices played a crucial role in stabilizing feedstock material costs, including PTA and MEG, thereby mitigating the BOPET Film prices for the week ending on August 18, 2023.
However, the downstream packaging films industry encountered headwinds, primarily due to soaring inflation rates in the US and European regions. The macroeconomic environment marked by elevated inflation adversely impacted consumer spending patterns, amplifying the market's prevailing bearish sentiment. The resultant reduced purchasing momentum from derivative sectors, particularly BOPET Film packaging and consumer goods, is a testament to the cautious approach adopted by buyers, who now prioritize minimal inventories of BOPET Film and strategic material acquisitions.
In this landscape, the demand for BOPET Film held steady within the downstream food and beverage packaging sector. However, this demand stability contrasted with an oversupply situation, indicating a bearish market sentiment driven by excessive availability on the global stage. Notably, the easing of freight rates during this period supported the BOPET Film's price trend.
A similar narrative unfolded in the Asian market, where BOPET Film prices mirrored the bearish trend. A key factor behind this trend was the devaluation of raw materials, stemming from weakened upstream costs in the wake of recent declines in oil prices. A prolonged spell of sluggish demand exacerbated this decline in the feedstock PET market. As the weather warmed, downstream players exhibited caution, maintaining a need-based approach to procurement rather than replenishing their supplies in bulk.
While stable prices of feedstock materials like PTA and MEG partly supported the market, the upstream sector's lack of strong production support and the abundance of existing inventories were significant constraints on any upward price movement.
According to ChemAnalyst, the price of BOPET Film may increase in the upcoming week as the demand from the downstream packaging industry may increase and affect BOPET Film price dynamics.