France's Tergal lifts PET rate but demand still weak

08 October 2008 17:58  [Source: ICIS news]

LONDON (ICIS news)--French polyethylene terephthalate (PET) and fibre producer Tergal Industries has resumed normal output at its plant following renewed demand but prices were still falling, a company source said on Wednesday.

 

“[The plant] ran for 65%-70% for a month in September until this weekend. We increased progressively to maximum to today,” the source said.

 

An increase in the level of enquiries prompted the return to normal rates. Customers he said, were replensishing their low stocks in anticipation of a relatively stable price through to November.

 

“Some [customers] don’t expect much decrease in price in November,” he said.

 

The overall weak demand though, was still a matter for concern as producers fought to maintain as much price stability as possible.

 

Manufacturers were negotiating for a €20-40/tonne decrease from September into October, while buyers were pushing for falls of up to €100/tonne ($136/tonne).

 

One major consumer reported achieving decreases of €100/tonne from one supplier and €150/tonne from another.

 

One producer described other sellers’ aspirations as wishful thinking. “I am afraid it [the October price] will end up at minus €100/tonne,” he said.

 

The PET price discussions were particularly strained because the value of September paraxylene (PX), a major raw material, was yet to be determined.

 

The PX market was operating with a provisional figure of €900/tonne FD (free delivered) NWE (northwest Europe), down €80/tonne from the August contract level.

 

Another cause for confusion for PET settlers was the October mono ethylene glycol (MEG) contract price which was still under negotiation.

 

Customers were looking for a figure beginning with a seven, but producers were talking around €825-830/tonne, down from September’s €875/tonne FD NWE.

 

Debt-stricken Tergal Industries was still in search of a buyer but was operating normally, the company source said.

 

Tergal’s PET unit in Gauchy, France, has capacity rated at 65,000 tonnes/year and is the country’s only PET plant. Fibre capacity was quoted at 35,000 tonnes/year.

 

The September reference price range is currently €1,495-1,620/tonne FD (free delivered) WE (west Europe), according to global chemical market intelligence service ICIS pricing.

 

($1 = €0.73)

 

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By: Caroline Howard
+44 20 8652 3214

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