24 March 2011 20:00 [Source: ICIS news]
The rise brings prices to 70.68-70.78 cents/lb ($1,558-1,560/tonne, €1,106-1,108/tonne) DEL (delivered).
A PTA consumer said its March contract price is 70.73 cents/lb, based on a formula that links the PTA price to the monthly contract price movement of upstream paraxylene (PX).
Unusually, the PX March contract price was concluded at a split settlement of 84.75 cents/lb and 85.50 cents/lb DEL, up 2.75 cents/lb and 3.50 cents/lb from February.
PTA is the principal feedstock for polyethylene terephthalate (PET), which is used to make plastic bottles and polyester fibre.
US PET producers had announced domestic price increases of 6-7 cents/lb for March, on the assumption that the PX price would be concluded up 4-5 cents/lb from February.
Although the PX price hike turned out to be lower than expected, sellers maintained that substantial March hikes on PET were still justified, on the grounds that PET manufacturers have seen their margins severely eroded in recent months.
“Our contract customers whose pricing is indexed off raw material movement will have price movements that are likely going to be less than 7 [cents/lb]. However, spot customers and contract customers who do not have a pricing mechanism tied to some type of [raw material] index have increased by 7 [cents/lb],” one PET producer said.
A buyer took a different view, saying that an increase of 5 cents/lb would be a “good deal” for PET producers and insisted that 7 cents/lb “will not pass through".
US PET producers include DAK Americas, Indorama, Mossi & Ghisolfi (M&G) and NanYa.
($1 = €0.71)
For more on PTA and PET visit ICIS chemical intelligence
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