Global PET Resin Market Faces Uncertainty Amidst Reduced Production and Dull Demand

The European Polyethylene Terephthalate (PET) Resin market witnessed a marginal price increase as it grappled with challenges in its supply chain and trade dynamics. This development was primarily attributed to the closure of one PET Resin chip production line at JBF Belgium in September, with plans to shut down another line by the end of October. However, the exact date for resuming operations remains uncertain, casting uncertainty on regional supply.

The JBF Belgium plant, with a production capacity of 400kt/year, played a significant role in the European PET Resin chip supply chain. The shutdown of these production lines placed pressure on manufacturers and traders in the region, leading to a slight price increase.

Simultaneously, the PET Resin market in the United States experienced a decline in the previous week, which later stabilized, largely due to a subdued market outlook. In September 2023, the US service sector's output remained stagnant, with manufacturing production showing modest growth. New orders saw a sharp decline, and backlogs of work decreased at a faster rate. Despite these challenges, employment continued to rise, as indicated by a slight increment in the Purchasing Managers' Index (PMI) value.

However, concerns also arose due to the slowdown in the downstream market from the Asian market, leading to reports of PET Resin factories reducing their output. Currently, the Asian market has reported a reduced capacity of PET Resin plants, which has exceeded 4 million tons, resulting in a daily production loss of over 13,000 tons. The average utilization rate of domestic PET Resin factories is anticipated to drop to around 80%, nearing a three-year low by the upcoming weekend.

In the supply sector, some traders find themselves with a relatively high level of unsold inventory, potentially facing greater inventory pressures if orders do not materialize. However, as prices dipped into a lower range, downstream beverage manufacturers began making large-scale purchases, improving the trading atmosphere. Many PET Resin chip factories are cutting production to stabilize prices and mitigate inventory growth. Simultaneously, the decline in raw material costs has provided these factories more operational flexibility.

Conclusively, the pricing analyst of ChemAnalyst forecasted that the market price for PET Resin might continue to trend downward in Europe. This could be due to the reduced demand from downstream industries amid a slowdown in the feedstock market. However, some participants also anticipate that the US and Asian PET Resin markets might also drop due to low offtakes from the downstream industries in the global market.