11 December 2009 23:59 [Source: ICIS news]
LONDON (ICIS news)--The polyethylene terephthalate (PET) industry is experiencing high prices and continued demand during what was traditionally deemed to be the low season, buyers and sellers agreed.
“We are trying to get plus €60-70/tonne ($88-103/tonne) over November prices if only to recover feedstock costs, as paraxylene (PX) and monoethylene glycol (MEG) increases amount to €45/tonne for PET producers,” a producer said.
Sellers were targeting increases of up to €70/tonne over the November price of €890-920/tonne FD (free delivered) ?xml:namespace>
This level was as yet elusive, according to most players, though a second producer said it had succeeded in doing so.
European PET operating rates remained reduced and imports were becoming less competitive, industry players said.
“In December I ordered much more than I thought I would have to, two to three times more because there is need for more [end] product and [end-users] are getting more orders,” a PET customer said.
Imported material committed for December arrival was still priced around €900/tonne FD, with small lots being sold just above this, sources said.
New business, however, was being conducted around €900/tonne CFR (cost and freight), putting free delivered numbers into the mid-to-high €900s/tonne, they added.
“Now import offers are at sky-high levels of €930/tonne CFR for delivery in January,” a trader commented.
European customers had anticipated business to slow down and prices to reflect this. Now, several were reportedly scrambling for product just to keep them going until they restarted in January, while others were simply pre-buying ahead of potentially higher prices next month.
“For three months we all thought that prices would drop, so nobody bought and now we have been forced to buy,” a buyer said.
Some industry players were convinced that the price would keep shifting up in January.
“I think that the price will increase in January. We have been really active this week because people want to be sure to secure material,” a trader said.
A trader reported receiving enquiries for January deliveries from customers expecting further increases next month.
This latest uptick was attributed partly to mild weather in some European areas, which results in increased demand for PET bottles, and to soaring feedstock prices.
However, Asia was said to be the main driver for the increases in PET prices as offers there for the product hit $1,250/tonne FOB (free on board)
($1 = €0.68)
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