Muted Overseas Demand Leads the US BOPET Film Prices to Depreciate in August 2023
Muted Overseas Demand Leads the US BOPET Film Prices to Depreciate in August 2023

Muted Overseas Demand Leads the US BOPET Film Prices to Depreciate in August 2023

  • 19-Sep-2023 6:28 PM
  • Journalist: Jung Hoon

BOPET Film  prices have declined marginally by 0.2% during August in the USA market due to the declining costs of feedstock Polyethylene Terephthalate by 0.3%. BOPET Film is primarily used in the packaging industry for automobile and vinyl discs. Demand from the downstream automotive industry has largely remained constant since June, with a marginal appreciation of 2% recorded in August. Additionally, BOPET Film is also used for insulation in the electronics and electrical industry. However, demand from the electronics sector appears weak despite inflation rates, which were recorded at 2.34% in August and continued to appreciate by 0.6% until the second week of September 2023, according to FRED. Domestic demand for BOPET Film has been negatively affected by fears of interest rate increments among the local population. Furthermore, demand from importing countries such as Mexico is not healthy, as automobile sales in Mexico and Canada have remained constant since June 2023. Although automotive sales increased by 6% in Canada and by only 2% in Mexico in August 2023, it was not sufficient to change the existing bearish situation for BOPET Film prices in the United States.

From the perspective of manufacturing activities, industrial output in the United States increased marginally by 0.5% in August, with further appreciation expected in September, increasing the demand for BOPET Film for packaging purposes. In terms of secondary demand from the beverage and bottling industry, purchasing sentiments have remained cautious as locals are concerned about rising interest rates, as the target of the Federal Bank to cool inflation rates to below 2% has not yet been achieved. Additionally, purchasing activities in the beverage sector generally weaken in North America due to the onset of the winter season.

Regarding demand for electrical insulation in the construction sector, the performance of the construction industry was disappointing, as key market players reported insufficient recovery in August. As inflation rates have not yet been brought under control, key players continue to cautiously invest in the sector, with most sentiments being pessimistic, further adversely affecting the market for BOPET Film.

Overall, prices of BOPET Film are expected to increase due to ongoing fluctuations in the prices of upstream Crude Oil, as Saudi Arabia and Russia limit supplies for export. This may affect the prices of feedstock PET, which is also expected to increase in September. Additionally, increments in production costs are likely as energy costs rise in the winter season.

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