The Polyethylene Terephthalate market continues its uptrend in the Indian domestic market owing to speculations around the global supply chains and strong demand fundamentals. In the latest development, as of 7th March 2022, crude oil prices break the USD 130 per barrel mark and sent shock waves in the petrochemical market.
The speculations around the global crude oil supply are unable to ease and hence crude oil prices are trending upwards since the beginning of the Ukraine-Russia conflict. This has increased overall cost pressure on key-value chains including Polyethylene Terephthalate. Purified Terephthalic acid relies heavily on aromatics for production and aromatics religiously follow the trend of crude oil. Therefore, mounting pressure from upstream PTA has translated into a price increase for PET. As of the 1st week of March, Polyethylene terephthalate prices were assessed at INR 113000 per MT on an Ex-location basis gaining more than 6.34% since the conclusion of January 2022.
India depends majorly on neighbouring South Asian and Far East Asian countries for its Purified Terephthalic Acid (PTA) demand. The ongoing conflict in Europe has again put nascently recovered supply chains under another stiff test after the covid outbreak. Consequently, petrochemical dependence on other countries is likely to tighten the material available in the Indian domestic markets and taking these cues Indian domestic market participants have increased the prices of available material.
Meanwhile, the demand for Polyethylene terephthalate has witnessed an incessant rise as the Spring season gives way to Summer which traditionally has been the peak season of consumption where PET forms a staple for food and beverage packaging.
As per ChemAnalyst, “Polyethylene terephthalate market is expected to maintain bullish run into March and April as firm demand fundamentals are likely to outpace the constrained supply dynamics. The world is keenly watching the current developments around the conflict between Ukraine and Russia which has turned crude oil market chaotic and set petrochemical market on an up-trending spiral.”
