18 September 2008 17:08 [Source: ICIS news]
LONDON (ICIS news)--Demand for polyethylene terephthalate (PET) was picking up in Europe in September as buyers replenished stocks but the market is still soft and operating rates were reduced, market sources said on Thursday.
“We feel the market has woken up a little,” said one large PET consumer. "Prices have really fallen, we have seen European levels come down by €50-60/tonne ($71-86/tonne) in September but still see operating rates between 50-60%."
Falling raw materials and ample supply had led to widespread talk of €50/tonne drops in September contracts, which was broadly in line with August decreases.
The pick-up in buying interest was more due to low stocks at consumer level than any fundamental increase in end-user demand, added sources.
Rapid decreases in upstream paraxylene and monoethylene glycol prices have given PET sellers some cost relief but poor demand for bottle grade material in the peak summer season has led to a reduction in operating rates.
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Capacity of the unit was put at 160,000 tonnes/year, according to ICIS plants and projects.
"We have to react to the market,"added the source.
"These are not good times, we see small companies going down, who will be next?"
The rise in costs earlier in 2008 has contributed to structural weakness in the market, with reports of several plants shut down and others running at operational minimum levels.
Debts led French producer Tergal to look for a buyer.
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