US bottle-grade PET prices settle down 2 cents/lb on average

29 July 2010 22:28  [Source: ICIS news]

HOUSTON (ICIS)--The price for US bottle-grade polyethylene terephthalate (PET) dropped by an average of 2 cents/lb ($44/tonne, €34/tonne) in July with the degree of decrease depending on where a buyer's contracts were in June, sources said on Thursday.

The assessed fall in prices put the July contract price range at 68.96-71.96 cents/lb DEL (delivered).

Sources said that negotiated July contracts fell by 1.50-2.50 cents/lb for most buyers, others received decreases of 3.00 cents/lb.

Transactions at minus 3 cents/lb were made for buyers with deals from producers that stuck to only minus 2 cents/lb in June. The market averaged a 2.50-cent/lb fall in June.

"June settlement prices were above where they should have settled and part of that got taken out of July," a buyer explained.

The real pricing evaluation was the two-month average coupling June and July, which were cumulatively down 4.50 cents/lb on average, buyers and sellers said.

Falling feedstock costs have driven PET prices down despite demand being at its seasonal peak amid hot summer weather driving bottled beverage sales.

The US July paraxylene (PX) benchmark fell by 1.75 cents/lb to an eight-month low for the contract. US ethylene glycol (MEG) was down around 5.00 cents/lb in July.

A year-over-year uptick in travel and above average temperatures for much of the summer has also spurred demand, a producer said.

"The water market is very robust," the supplier said.

As high PET run rates start to trend downward next month, market players were anticipating a rollover for August prices or a slight decrease. But visibility on its direction was unclear until August PX contracts get done.

US PET producers include Dak, Eastman, Indorama, Invista, Mossi & Ghisolfi (M&G), Nanya and Wellman.

($1 = €0.77)

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By: Ryan Hickman
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