Europe Jan PET drops €20/tonne but could recover in February

23 January 2009 23:59  [Source: ICIS news]

LONDON (ICIS news)--Most January polyethylene terephthalate (PET) prices dropped €20/tonne ($27/tonne) because of low demand and surplus material, but increases of up to €50/tonne were expected in February, buyers and sellers said on Friday.

“We pulled prices down to be competitive...I am thinking plus €50/tonne for February,” a producer said.

January contracts slipped to €770-860/tonne free delivered (FD) Europe, according to global chemical market intelligence service ICIS pricing. The ICIS reference prices were assessed at €1,165-1,290/tonne FD W Europe and €890-995/tonne FD E Europe.      

These figures were also applicable for some of the spot activity this week, both for imported and domestic material, sources said.                                                 

With paraxylene (PX) looking firm, and crude creeping up again, the value of February PET could see a revival, sources said.

“It [the price of PET] will increase by between €0-40/tonne...I hope it will be €20-30/tonne in February,” one buyer commented.

Operating rates in Europe were reduced to around 65-70% on average, according to most commentators. One supplier though, said it had increased rates to cope with better demand.

“We are completely sold out,” he added.

The big question was how demand would develop. Pre-buying was noted in early January, but this activity has since fallen, sources said. The sheet market was performing better than the pre-form sector.

Pre-forms had been under particular duress, but some sources said they thought the situation was changing.

“There are signs of recovery in pre-form, but not in the still mineral water business,” according to one supplier.

Pre-marketing from new capacity in the Middle East was featuring in discussions, but details were vague. Some said material was on offer €40-50/tonne below current European levels.

“I am afraid it [new Middle Eastern material] could be very bad for Europe. It could affect European...volumes or imports from Asia,” a supplier warned.

February negotiations had not yet begun.

($1 = €0.77)

For more on PET visit ICIS chemical intelligence
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By: Caroline Howard
+44 20 8652 3214

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