In Asia, despite the softer feedstock costs, PET producers continue to show a determined attitude regarding their firm PET pricing policy, pointing to the still strong oil prices, hovering above $100/bbl. They also point to their tight operating margins as another reason for their resolute stance.

In feedstock news, spot PTA prices lost $10/ton and MEG prices retreated by $30/ton on CFR China basis when compared to the beginning of March. Meanwhile, PX offers, which gained $20/ton on a week over week basis, still indicate a slight softening of $5/ton with respect to early March. However, the recent earthquake which happened in Japan on March 11th, caused supply concerns regarding PX. This situation could boost spot prices once again.

In the export market, Korean PET producers' offers gained $10/ton at the low end while they remained unchanged at the high end on FOB Busan, cash basis. Meanwhile, players comment that offers are mostly concentrating towards the high end of the range even though trading activities are limited.

In China's export market, the offer range gained $20/ton at the low end while it remained stable at the high end on FOB China, cash basis. Despite the buyers' reluctance to engage in trading activities, sellers appeared adamant on their prices. Buyers' buy ideas are mostly standing $30-40/ton below the current export offer range. Therefore, most traders elect to trade on back-to-back basis, trying to avoid building stocks.

Inside China, the local offer range moved up by CNY100/ton ($15/ton) at both ends of the overall price range on a week over week basis. Within the range most producers preferred to maintain their prices given the weakened buying interest since buyers feel hesitant to make fresh purchases as they lack a clear view regarding the future direction of the market. However, many producers point to the fact that they are still offering below their theoretical production costs and therefore, they are not willing to offer discounts even for the sake of speeding up their sales.

Considering the fact that PET producers are reluctant to offer discounts from their offer levels, highlighting that their production costs are at break-even point, PET prices are likely to follow a stable trend at around the current levels over the short term while the earthquake in Japan could strengthen sentiment in the region.