Easing Covid Restrictions, Enhancing the Demand For PET In China

Shanghai, China: Global oil prices continue to rally upward amid optimistic demand from the local market in the wake of the easing lockdown situation in China. A derivative of Crude oil, Purified Terephthalic Acid increased, contributing to the hike in its end product Polyethylene Terephthalate prices. Further, demand for the product uplifts after Shanghai and Beijing have reopened from their extended lockdown, alongside scorching heat in China and South Asia.

The OPEC+ decision to increase crude oil production by July did not particularly relax the market trend of Crude oil for Asian importers. Since the recovery in China's market, the demand for crude oil remains high on the verge of reopening all Petrochemical units, which have been shut since March. Therefore, owing to the growing demand, Saudi Aramco increased its Crude oil rate for Asian customers by USD 2.10/barrel in June. At the same time, the company augmented the value for Northwest Europe and the Mediterranean regions.

In China, "Both Polyethylene Terephthalate and feedstock Purified Terephthalic Acid have elevated, following soaring crude oil and heightened demand from downstream Polyethylene Terephthalate bottle industry." This can further be comprehended by the rising temperature in the Asia- Pacific region, inspiring the demand for Polyethylene Terephthalate bottles, mainly in the beverages and water bottles sector. According to the sources in China, Beijing will further ease its Covid-19 measures, foreseeing the decreasing Covid cases in the city, which is anticipated to boost the market sentiment in the forthcoming weeks. Consequently, traffic restrictions were eased on June 6, smoothening the supply of the product to its worldwide market.

In Europe, Polyethylene Terephthalate rolled over for June, observing calmer demand and an uncompetitive import market. Due to the firmer crude oil prices, some manufacturers in West Europe are mulling over feasible hikes in their Polyethylene Terephthalate prices. Traders quoted, "Even though the summer season is hitting in European countries, the demand for Polyethylene Terephthalate depresses as compared to the previous year's summer season.

Therefore, ChemAnalyst Prediction states that the "Polyethylene Terephthalate market is expected to heighten, supported by the reopening of the Chinese Cities and the Summer in Western countries. This could further be assisted by a persistent increase in crude oil prices, contributing to the increasing cost pressure due to rising feedstock Purified Terephthalic Acid and Mono-Ethylene Glycol.