US PET producers seek 3 cents/lb September hike on high demand

13 August 2010 21:34  [Source: ICIS news]

HOUSTON (ICIS)--A majority of the major US polyethylene terephthalate (PET) producers have announced September price hikes of 3 cents/lb ($66/tonne, €51/tonne) for bottle-grade material amid strong demand, sources said on Friday, even as August prices remain not finalised.

August prices appeared headed for a rollover, multiple sources said, despite an unsettled US paraxylene (PX) contract this month.

For September, five US PET manufacturers - DAK, Eastman, Mossi & Ghisolfi, Nanya and Wellman - were heard to have formally told customers that prices would be up 3 cents/lb.

There were no formal price notifications heard from Invista or Indorama, sources said.

A 3-cent increase would be added to the July range of 68.96-71.96 cents/lb DEL (delivered), as assessed by ICIS pricing.

The announcements pre-empted raw material movements that traditionally dictate the direction of prices. But one PET seller said that the increases were irrespective of feedstock pricing, as suppliers were looking to maintain margins amid strong demand and rising operating costs.

Both buyers and sellers agreed that PET demand had remained robust into August, at a time when it has traditionally turned downward. The blistering heat throughout much of the US has kept sales of bottled drinks strong, sources said.

High volumes of PET buying was keeping production high with one producer explaining that its plants were all currently running above 90%.

Another producer said that there was some market consensus that PX would be on the rise next month, and that the PET market needed to give customers lead time on pricing ahead of September.

The seller admitted that the notice was more of a forecast on pricing and would depend on conditions during that month, including demand.

In addition to PX prices, PET's other major raw material market - ethylene glycol (EG) - was anticipated a rollover for August, with one supplier announcing a 10 cents/lb hike for September.

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

($1 = €0.78)

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By: Ryan Hickman
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