18 November 2010 15:27 [Source: ICIS news]
VALENCIA, Spain (ICIS)--Polyethylene terephthalate (PET) traders in Europe are having difficulty finding prompt product at workable prices because of a stand-off between buyers and sellers, sources said on Thursday.
“We are at a wait-and-see stage. Suppliers don’t want to drop their prices and customers don’t want to accept what suppliers are offering,” one trader said.
Spot activity was thin because of the situation, buyers and sellers agreed.
What little local spot was available went at around €1,250/tonne but sellers now say they are sold out.
However, the trader said: “I am not sure they are really sold out.” It was possible producers were holding back on volumes for December sales.
Import prices were said to be unworkable.
A reseller said: “Even though prices came down in Asia the arbitrage is not open and the CFR (cost and freight) price is closer to our free delivered price at the moment.”
This situation was largely caused by the recent dramatic spikes in prices across the Asian polyester chain. Although Asian values had since come off again, the sense of volatility remained a concern for European industry players.
The lack of cotton availability due to poor harvests was contributing to the pressure on prices and causing a push on demand for polyester fibres.
A European producer said: “The volatile market is driven by Asia. Prices went substantially up and will continue to do so because cotton won’t be able to replace polyester for six months or so.”
The producer said it had heard of importers hunting for product inside Europe because of the high cost of importing it.
However, not everyone agreed with the idea that the upward price trend was bound to continue.
One importer said: “[Suppliers from Asia and the Middle East] say they are completely booked for November, and December material is available. For sure [spot prices] will not go up.”
Offers from the Middle East were heard at $1,650/tonne CFR this week, while sellers in Asia were willing to discuss business at $1,500-1,550/tonne FOB (free on board) China.
A second trader was concerned that players that bought PET at €1,070-1,080/tonne CFR before the price hikes in Asia would be housing it at the end of November.
The trader said: “Whoever took their chances and bought spot at that price was dampening the excitement for December.”
Other buyers and sellers wondered whether there would be enough demand in the December market to warrant further price increases, as it was the time of year when people normally destock.
($1 = €0.74)
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