23 September 2010 16:53 [Source: ICIS news]
LONDON (ICIS)--European polyethylene terephthalate (PET) contract prices for September rose by €30-50/tonne ($40-67/tonne) from August, on the back of tight supply and rising production costs, buyers and sellers said on Thursday.
“Initially [PET] settlements came out at plus €30-35/tonne and anyone who left it too late got plus €40-45/tonne. If they want extra then its plus €50/tonne,” a producer said.
Some industry players reported an upward shift of €20-25/tonne, but these were not verified by the sell side.
Most contracts increased to €1,080-1,120/tonne FD (free delivered) ?xml:namespace>
The smaller increases were agreed before the emergence of feedstock price hikes, sources said.
The cost of PET production soared in September: Paraxylene (PX), the raw material for PET’s main feedstock purified terephthalic acid (PTA), went up by €65/tonne in September to €810/tonne FD NWE (northwest
Monoethylene glycol (MEG), PET’s other feedstock, climbed by €36/tonne to €791/tonne and was described as tight.
Uncertainty regarding PET market developments drove some customers to buy additional volumes in August and September in preparation for potentially higher prices coming to the fore later in the year. This activity, coupled with reduced imports, was causing sellers to run out of supplies, despite the bottling season drawing to a close.
“There is not much availability in
Some buyers feared more increases were on the way.
This sentiment was supported by a producer that said: “I am planning a further increase announcement in October by plus €50/tonne. End users seek [material] for pre-buying.”
Another producer agreed, explaining that the physical shortage of PET would force higher prices to reign in October. However, by November recent purchases of import material at September prices would start to arrive, resulting in downward pressure, it added.
Some industry sources argued that speculations about a firming market was prompting more pre-buying which could result in fewer requirements down the line and consequently less likelihood of higher numbers.
“If everyone is expecting an increase, that’s good for me as then we may actually see a decrease,” a customer said.
($1 = €0.75)
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