Demand, feedstocks pressure Latin American February PET prices higher

01 February 2011 23:22  [Source: ICIS news]

HOUSTON (ICIS)--Polyethylene terephthalate (PET) prices in Latin America will rise in February as a result of upward pressure from strong demand and higher-priced feedstocks, local sources said on Tuesday.

February PET prices will increase by at least $20/tonne (€15/tonne) over January, the amount depending on individual country market dynamics, participants said.

Sources noted concern over the impact of higher resin prices on demand during the current peak period in several countries in South America, and suggested the high season may be cut short. Others participants said that PET demand depends on how much soda people drink, which is more closely related to the weather than to resin prices.

Participants in Argentina, Brazil, and Colombia focused on the effect that ruined cotton crops in Pakistan are having on global fibre- and bottle-grade polyester demand and availability.

Additionally, India has curtailed exports of cotton in response to the cotton shortage, sources said.

With reduced global cotton availability, textile markets are pushing for increased production of the alternative polyester fibre, which in turn drives production away from bottle-grade polyester, or PET.

Contributing to upward pressure, feedstock paraxylene (PX) prices continue to rise.

The Asia Contract Price (ACP) for feedstock PX, a key industry indicator, has settled at $1,620/tonne for February, up $240/tonne from January, as a result of tight supply, market sources said.

Both Mitsubishi Chemical and Mitsui Chemical settled the benchmark contract price with their respective suppliers - ExxonMobil, Idemitsu Kosan and JX Nippon Oil and Energy - on a CFR (cost and freight) Asia basis. South Korea-based S-Oil said it had also finalised its PX contract price at $1,620/tonne CFR Asia for February shipments with its respective customers.

January PET prices were assessed at $1,820-1,880/tonne DEL (delivered) in Argentina, $2,020-2,060/tonne in Brazil and $1,870-2,000/tonne in Colombia, according to ICIS.

($1 = €0.73)

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By: Ron Coifman
+1 713 525 2653

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