13 August 2010 06:14 [Source: ICIS news]
By Yu Guo
DUBAI (ICIS)--Polyethylene terephthalate (PET) bottle-grade chip demand in the Gulf Cooperation Council (GCC) region is expected to remain stable-to-soft in the third quarter of 2010 due to ample inventories and low consumption, producers and traders said on Friday.
“Traditionally demand from downstream beverage sectors peaks in July-August and will only begin to soften after mid-September,” said a major UAE-based converter, Intergulf.
However, despite relatively healthy beverage consumptions expected during the Muslim fasting month of Ramadan, it has failed to instil confidence in regional market participants as they reported slowing of buying activity over the last few weeks.
PET chips are mainly used for the bottled-water market, while some are used in making of the bottles for soft drinks and cooking oil.
Spot prices for PET bottle-grade chips around the GCC region has been on a downtrend since the beginning of July. Prices finally edged up slightly last week bolstered by higher discussion levels reported in ?xml:namespace>
PET bottle-grade chips spot prices were at $1,220-1,250/tonne (€952-975/tonne) CFR GCC on Thursday, according to ICIS.
“Whatever the end-users need they had already stocked up weeks ago and the healthy beverage demand [in the GCC region] will not help the PET bottle chip market in the next one and half months,” a major GCC producer said.
“The peak season for PET bottle chip demand is almost over,” he added.
Market activities traditionally slow down during Ramadan that started on Wednesday.
“There is no strong driver for the PET chip demand following the pre-Ramadan buying,” an UAE-based trader added.
“Market players are hardly at work, working hours are reduced and some buyers and traders only work three to four hours a day.”
However, a number of traders said they hoped the market would gather pace in the first half of September after the dawn-to-dusk fasting month comes to an end.
“We may anticipate some demand for PET bottle chip to surface in early or mid-September as converters return to restock,” said another trader based in
($1 = €0.78)
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