09 June 2010 17:49 [Source: ICIS news]
LONDON (ICIS news)--Polyethylene terephthalate (PET) customers are targeting June decreases in line with lower production costs and lagging demand, they said on Wednesday.
“A rollover is not our expectation even if it’s producers’ target. Customers want at least the raw material decrease of around €30/tonne ($36/tonne),” a buyer said.
A producer acknowledged that customers were putting pressure on them to lower their prices in June, but said it was refusing to budge from May’s levels of around €1,200/tonne FD (free delivered) Europe.
The price of PET raw materials fell in June. Paraxylene (PX) which feeds into PET’s main feedstock purified terephthalic acid (PTA), fell by €35/tonne in June to €835/tonne. This was putting pressure on PTA to drop by €24/tonne in the same month.
Mono ethylene glycol (MEG), PET’s other feedstock, saw its June contract price drop by €36/tonne to €820/tonne FD NWE (northwest ?xml:namespace>
Poor weather conditions during the summer peak season for PET bottlers resulted in lacklustre demand so far in June, buyers and sellers said. This situation was compounded by earlier bouts of pre-buying by customers in preparation for what is usually a period of peak demand, they added.
Demand has fallen because of bad weather and customers’ inventories are high, according to a reseller.
Film-grade packaging customers said their sector was relatively healthy, but still they were being offered reductions in the price of PET for June deliveries. One buyer reported receiving offers for spot material in June at decreases of €60-70/tonne compared with May.
Suppliers recently said shutdowns planned later in June were also supporting a firm market.
“Producers are all sold out,” one of them commented.
Earlier pre-buying may be causing some customers to hold back at the moment, but by the end of June or July the market could become tight as a result of there being less imports, a buyer speculated.
In May, PET contract values rose by around €60/tonne to €1,160-1,200/tonne FD (free delivered) NWE (northwest
($1 = €0.84)
ICIS will be developing a prototype report for PET (
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