06 March 2000 00:00 [Source: ACN]
Polyethylene terephthalate (PET) producers were attempting to hike prices of bottle-grade chip for March cargoes because of strong demand. South Korean offers have climbed to US$860-900/tonne fob Korea, an increase of more than US$50/tonne over February cargoes.
The strong feedstock cost-push has also prompted producers to seek price hikes. South Korean producers have achieved US$885-900/tonne fob Korea for small-volume exports to Australia and Japan. A Taiwanese producer said it has sold small volumes at US$900/tonne fob Taiwan to buyers in northern Europe.
However, most buyers in western Europe and North America have not yet accepted the proposed increase.
Producers were optimistic about the market outlook as enquiries from major markets have increased in the past few weeks. Q2 and Q3 are the peak demand seasons for PET and with no additions to capacity the demand supply balance is expected to remain snug in the coming months, said one producer.
However, South Korean producers were worried about the outcome of the ongoing European Union antidumping investigations into imports from South Korea (ACN 15 Nov, p9). The investigations also cover imports from India, Indonesia, Malaysia, South Korea, Taiwan and Thailand.
European buyers fear provisional duty could be levied in the next few months and are hesitating to buy from Asian suppliers, said South Korean producers (see p6). Producers have already started developing alternative markets in Russia, eastern Europe, Middle East and Africa.
Prices for fibre-grade chips were also on the rise, with South Korean and Thai offers at US$720-725/tonne fob Korea/Thailand.
This is an increase of US$50/tonne over February prices. Chinese buying ideas were at US$730/tonne cfr Shanghai, but traders believe Chinese buyers will eventually agree to producer offers. Indian buying ideas were lower at US$670-680/tonne cif Bombay.
Chinese import licences, due to expire in March, have been extended until April. New licences for 2000 have yet to be issued and traders expect this could take a few more months.
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