Insight Focus

  • China’s PTA futures closed higher on the week driven by elevated crude prices and logistics disruption.
  • COVID controls within China and port closures are cutting domestic and export supplies.
  • Short-term PET resin premiums should remain stable on continued tight supply.

  

PTA Futures and Forward Curve

  • The PTA futures market closed Friday higher for the week after crude oil’s price rebound through the first half of the week.
  • PTA’s 12-month forward curve remains backwardated.
  • COVID-induced logistics disruption in China has tightened PTA supply.
  • Future months are trading at a discount to the current April contract, with tighter supply adding short-term support.
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MEG Futures and Forward Curve

  • MEG futures drifted lower through the week.
  • Several producers have announced output cuts and maintenance periods, but port inventory remains high.
  • The current forward curve is in contango with future contracts, trading at a premium to current levels.
  • Growing demand from the polyester sector should help drive this recovery.
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PET Resin Export – Raw Material Spread and Forward Curve

  • The current premium over feedstock futures has fallen by around 10 USD/tonne to 133 USD/tonne with China’s PET resin export prices closing the week at 1,235 USD/tonne.
  • The PET export raw material forward curve remains flat, slightly backwardated over the next 12 months.
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Concluding Thoughts

  • COVID controls within China are disrupting logistics, reducing raw material and PET resin supply for domestic use and export.
  • PET resin export premiums should remain high in the short-term, supported by low inventory and large order volumes in hand.
  • Beyond April/May, export demand may be blunted by the Ukraine crisis and the loss of the summer shipment window to Europe.
  • The opportunity to absorb volumes elsewhere exists with availability still tight across the Americas.
  • PET export premiums should normalise in the medium-term, though.

  

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.

Other Insights That May Be of Interest…

European PET Market Rocked by War in Ukraine

PET Resin Trade Flows: Europe Awaits Asian Shipments

What the Ukraine Crisis Means for PET


Explainers That May Be of Interest…

Czapp Explains: Europe’s First Plastic Packaging Tax

Gareth Lamb

Gareth joined CZ in 2021 and is CZ’s PET analyst and recycling specialist. As well as regularly reporting on key market trends and dynamics, Gareth is also developing new research products and analytics within the PET and rPET space. Prior to joining CZ, Gareth led Wood Mackenzie’s PET research service and was Senior Consultant at IHS Markit, working within the petrochemical consulting team. Dr. Lamb graduated from the University of St Andrews with a PhD in organometallic chemistry; and has a masters of Chemistry degree from the University of Liverpool.

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