27 May 2010 13:33 [Source: ICIS news]
LONDON (ICIS news)--July polyethylene terephthalate (PET) prices could fall in Europe because of fewer than expected sales of PET bottles, buyers and sellers said on Thursday.
“My feeling is possibly that May has seen the [price] peak,” a trader commented, echoing views of other buyers and resellers.
Pre-buying in preparation for the peak summer season, bad weather which suppresses demand for bottled water and downward pressure on Asian prices were leading to lower PET prices in Europe, sources said.
A second trader described demand as “extremely weak” and several producers acknowledged that sales were falling.
“Some customers decided not to take their maximum [contract volumes for June] ... The weather is crazy,” one of them said.
However, some European producers were keen to raise prices even further in June and one said it was targeting €20-30/tonne ($24-37/tonne) over current levels.
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Producers were not perturbed by talk of weakness in upstream paraxylene (PX) or monoethylene glycol (MEG). One said it could result in a €30-35/tonne drop in PET manufacturing costs and others said this would create a greater margin for producers.
“Asian raw materials are falling and [PET] prices are falling, so
While most buyers and sellers acknowledged a downturn could be on its way, there was a difference of opinion as to when prices would actually start falling.
“Yes the tide may turn in July, but still CFR [cost and freight] prices from Asia/Middle East for late June arrival still lead to prices sustained at today’s level,” a European producer remarked.
May PET prices rose from April by €60/tonne on average, according to data from global chemical market intelligence service ICIS pricing.
This followed a steady climb from €850-920/tonne ($1,037-1,122/tonne) FD (free delivered)
Values have been consistently strong since quarter four largely because of a lack of domestic availability. The imports that were covering domestic shortages have since become uncompetitive because of less favourable exchange rates.
An antidumping campaign waged by European producers against PET from
($1 = €0.82)
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