Market analysis

ICIS: Global PET market starts 2026 with fragile demand and heavy reliance on seasonal triggers

2026-02-16 2:49 min Strategies & Market Analysis

Caroline Murray, ICIS London, United Kingdom

The global PET market has entered 2026 with soft demand, volatile freight and aggressive import competition defining sentiment across most regions.

Seasonality, freight volatility and speculative activity override fundamentals
Producers in multiple regions struggle to lift run rates meaningfully
Trade flows keep shifting as buyers chase the cheapest origin

Middle East: Seasonal drag dominates

Market activity is expected to remain muted through mid-March as Ramadan overlaps with the post-Lunar New Year slowdown, limiting buying appetite and trading visibility.

Gulf Cooperation Council (GCC) buyers that needed to restock have largely already done so, reducing urgency.

Price competitiveness remains fluid: Indian PET briefly held the advantage, but falling Chinese freight rates have restored competitiveness for China-origin cargoes.

With Chinese trading typically slowing during the holiday period, the region continues to operate at a subdued pace.

Asia: Speculation outweighs fundamentals

Asia remains the most speculation-driven PET market globally. Early-February volatility in upstream purified terephthalic acid (PTA) and paraxylene (PX) has since stabilised, but price movements continue to reflect futures activity rather than underlying demand.

PX-naphtha spreads have slipped below $300/tonne.

Fundamentals remain weak: beverage bottle demand has softened ahead of the holidays, with Chinese PET packaging industry run rates down by 5-8% week on week, while polyester fibre markets remain constrained by uncertain textile exports into the US.

Polyester staple fibre producers across the chain are running at unusually low rates from end-January through late March. Limited PTA expansions and a Q2 PX turnaround season – already priced into futures – could blunt the typical Q2 upswing.

A rumoured Chinese naphtha consumption tax is expected to have minimal impact. Some post-holiday demand improvement is anticipated if tourism and catering activity is robust.

US: Quiet, with summer optimism

US PET fundamentals have changed little in early 2026.

Some players point to PX as a possible source of upward price pressure.

Winter weather along the East Coast did not disrupt operations at major producers.

Domestic PET has slipped below import values – an unusual inversion – due to higher freight and ongoing tariff talk involving South Korea. Market participants largely view the tariff narrative as political noise.

Optimism remains for a steady summer-driven recovery rather than the sharp demand spikes seen in earlier years.

Latin America: Shifting trade follows

Latin America saw slightly firmer demand in January, with further improvement expected into March, though volumes remain below historical norms.

Producers continue to fight oversupply with aggressive price matching.

Trade flows are shifting: Argentina has seen rising imports from China; Mexico’s volumes have redirected towards Malaysia and Vietnam; and Brazil has moved from Southeast Asian suppliers towards Turkish origin in early 2026.

Freight distortions remain a major influence, at times decoupling regional prices from Asia.

Some short-term increases were seen following January moves in China, though a softening trend is expected later in the year.

Mexico’s higher beverage taxes have not triggered the demand losses feared.

Europe: Industry till fighting for survival

Europe remains the most structurally challenged region, with end-user demand expected to mirror last year’s weak levels.

A sudden shortage of supply caused by PET or upstream import delays, technical failures or decisions to cull more output in Europe would likely see customers scurrying for material.

Several sites continue to operate below what would be considered efficient rates, according to sources, squeezed by high costs and the threat of import competition from other regions.

While trying to align with upstream developments, suppliers are individually competing with imports, often successfully luring buyers back to local sourcing.

Overall though, sentiment remains bleak, with several producers described as fighting for survival.

Conclusion

Across all regions, the PET market enters 2026 with fragile demand, shifting trade flows and a heavy reliance on seasonal triggers – Ramadan, Lunar New Year, summer beverages, and Q2 turnarounds – to provide any meaningful direction.

Structural issues remain most pronounced in Europe, while Asia continues to be pulled by speculative forces more than fundamentals. The Americas show pockets of resilience, but the broader backdrop remains one of cautious, defensive trading.

PET resins can be broadly classified into bottle, fibre or film grade, named according to the downstream applications. Bottle grade resin is the most commonly traded form of PET resin and it is used in bottle and container packaging through blow moulding and thermoforming.

Fibre grade resin goes into making polyester fibre, while film grade resin is used in electrical and flexible packaging applications. PET can be compounded with glass fibre for the production of engineering plastics.

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