Insight Focus
- Chinese PTA and MEG closed lower for the week, dragged down by crude’s collapse.
- Whilst Chinese PET resin export prices have eased, the premium over feedstock futures has widened.
- PET raw material costs should remain rangebound in near term.
PTA Futures and Forward Curve
- The PTA futures market closed lower for the week on Friday.
- This was primarily driven by crude oil’s sharp drop.
- The PTA 12-month forward curve is backwardated, once again, with future months trading at a discount to the April contract.
- Improved supply and demand may add support inthe short term.
MEG Futures and Forward Curve
- MEG futures receded, tracking the fall in crude oil.
- The forward curve is now in contango with future contracts trading at a premium to April levels.
- High inventory levels may limit upward pressure in short-term.
PET Resin Export – Raw Material Spread and Forward Curve
- With China’s PET resin export prices closing the week at 1,210 USD/tonne, the current premium over feedstock futures has widened to 143 USD/tonne.
- The PET export-raw material forward curve is flat.
- Current spot offers for June shipment are around 1,230 USD/tonne FOB, having dipped to 1,200 USD/tonne mid-week.
Concluding Thoughts
- Crude oil should remain volatile in the near term, with PTA and MEG futures reacting accordingly.
- Record orders for Chinese PET resin over the last six months will continue to support the high premiums over feedstock for the reminder of H1’22 due to lack of availability.
- Premiums may even widen slightly with peak demand in April/May, lending support to current indications for June shipment.
For PET hedging enquiries, please contact the Risk Management team, MKirby@czarnikow.com.
And for Research and Analysis, please contact GLamb@czarnikow.com.
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PET Resin Trade Flows: Europe Awaits Asian Shipments
What the Ukraine Crisis Means for PET
Explainers That May Be of Interest…
