Producer targets €120/tonne increase in Europe PET

03 November 2010 14:01  [Source: ICIS news]

ALICANTE, Spain (ICIS)--A major polyethylene terephthalate (PET) producer in Europe is targeting a price increase of €120/tonne ($169/tonne) from October to November in an attempt to maintain margins, it said on Wednesday.

“I won’t pull [€120/tonne] off the table if I am to keep my margin, but will the market accept it?” said the producer.

The proposed increase would take European prices up from the October contract settlements of €1,110-1,170/tonne FD (free delivered) Europe.

European raw material costs have been spiralling upwards following jumps in Asia, which were affecting the value of PET around the world. 

In November, the price of the upstream product paraxylene (PX) could surpass €910/tonne, up from October’s €805/tonne FD NWE (northwest Europe).

Monoethylene glycol (MEG), PET’s other raw material, could reach €900/tonne, according to the producer.

MEG sellers are looking for €930-970/tonne FD NWE for November contracts. An October settlement was outstanding, with only one agreement recorded at €806/tonne, up €15/tonne from September.

PET customers and resellers acknowledged upstream developments but said they could not absorb the targeted increases. One source said a maximum of €70/tonne would be the likely outcome.  

Prices in Asia were “crazy”, according to several sources. A PET customer added that offers from importers at $1,380/tonne FOB (free on board) China were unrealistic, as prices in Europe were still lower.

“There is enough competition in Europe,” said the PET customer.

The recent EU investigation into PET antidumping prompted plants in the UK, Spain and Italy to restart as the peak bottling season came to an end, leaving sufficient regional availability, according to the customer.

Spot PET prices hit €1,200/tonne FD Europe at the end of October, up from around €1,100/tonne at the beginning of the month.

“It will be difficult to go over €1,200/tonne,” said a reseller. It added that in recent days customers had reviewed their requirements downwards on receipt of high offers.

“[Buyers] will try to live off fat for a while,” the producer concluded.

($1 = €0.71)

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By: Caroline Murray
44208 652 3214

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