The speculations around the global crude oil supply were unable to ease hence crude oil prices was trending upwards since the beginning of Ukraine-Russia conflict affected its derivatives paraxylene and Purified Terephthalic Acid (PTA) market. Polyethylene Terephthalate (PET) market continuously rose in India in the first quarter owing to the high demand from packaging and textile industries. The closing price for PET Resin Bottle Grade was quoted at USD 1240/MT FD Antwerp. Meanwhile, European monthly producer prices fell by 0.9% in May, highlighting the challenges faced by the economy in reviving demand and restoring economic growth. In addition, as beverage producers had already procured sufficient material at the beginning of May, they did not think of restocking as sales were lower than expected. Overall, despite lower demand, there was still room for growth in the beverage and bottling industry during the peak summer season. The macroeconomic environment was reflected in the fall in raw material costs for paraxylene and mono-ethylene glycol, suggesting lower consumption levels in Europe. Analysts and industry experts attribute the slump to high levels of inventory in the packaging sector, which has led to fundamentally saturated demand. The Polyethylene terephthalate (PET) bottle market in Europe has been sluggish throughout the second quarter of 2023 due to the fall in crude oil prices, which has had a negative impact on its derivative market. Finally, the price of PET was quoted at USD 915/MT FOB Busan. As a result, consumers reduced their spending, while companies reduced their selling pressure or kept it mostly stable to stimulate sales in the region. According to data from Statistics Korea, the consumer price index remained unchanged at 111.12 in June 2023 as sluggish global demand weighed on the market. According to market participants, there was no room for price increases as end-user demand was low, and packaging manufacturers and distributors were unable to raise downstream prices. In the upstream market, input costs decreased due to lower raw material PTA prices. Towards the end of the second quarter of 2023, PET resin prices declined due to weaker feedstock prices amid the fall in oil prices, which dragged the market down this week. However, demand from the downstream packaging sector has been mixed, although there was some improvement in the beverage and bottling sectors. Polyethylene terephthalate (PET) prices rose during the first half of Q2 in the Asian market as the sudden announcement by an OPEC+ member to cut crude oil production by more than 1.6 million barrels per day in May pushed up global oil prices, which in turn led to a significant increase in raw material prices. Finally, the price of PET resin was estimated at USD 1180/MT FAS Houston. Therefore, inflation and recessionary fear had a negative impact on consumer spending, which in turn had a negative effect on demand, as consumers tried to save money amid the uncertainty in the market. Manufacturing activity also declined in the region due to sluggish purchasing activity amid high-interest rates and inflation, with FRED data also showing that the production price index in the US market fell to 245.83 in June 2023. In the middle of the second quarter of 2023, supply was also affected by labor disruptions on the West Coast, which resulted in cargo ship delays and port congestion, but low demand from downstream industries weakened purchasing activity. Supply remained at normal levels as the supply of Purified Terephthalic Acid (PTA) increased. Downstream industries reduced operating rates and waited for demand to pick up and raw material prices to stabilize. The prices for Polyethylene Terephthalate (PET) Resin Bottle Grade declined throughout the second Quarter of 2023 in the North American market.
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