31 March 2011 17:35 [Source: ICIS news]
VALENCIA, Spain (ICIS)--Polyethylene terephthalate (PET) producers in Europe are targeting April increases of €15–50/tonne ($21–70/tonne) because of tight supply, they said on Thursday.
“We are targeting an increase of €50/tonne [in April] because the PET market is short… We see that the market is prepared to pay this… We are in a very stressed situation and don’t have a single kilo to spare,” said a producer.
A second producer is seeking a €30/tonne hike for April, up from around €1,600/tonne at its freely negotiated accounts. This level of increase will compensate for the increased spread of upstream purified terephthalic acid (PTA), it said.
A third producer that recorded freely negotiated March contracts at €1,550–1,630/tonne FD (free delivered) Europe said it would try to pull up the low end by €15–20/tonne and maintain stability at the high end.
“If there is not much of an increase on raw materials, we can’t push more out of the market. [The market] is still tight though,” the producer said.
“There are no offers in Europe. They are simply not there… Demand is good because availability is tight in Europe,” said a customer.
Buyers are purchasing imports "to be on the safe side", a reseller said.
“It is really a gamble but the situation at the moment is so unclear,” the reseller added.
Buyers and sellers said that the market is tight but were unclear as to the direction of raw materials.
Spot prices of Asian PTA and PET’s secondary feedstock, monoethylene glycol (MEG), are softening, as is demand.
This news led a fourth European producer to attempt a €30–40/tonne increase for April PET.
“We will follow raw materials and try for a bit more. We are sold out,” said the producer.
The producer added that it is expecting a €20–30/tonne increase for April MEG, which would put contracts at €1,150–1,160/tonne FD NWE (northwest Europe).
“Plus €30/tonne, €40/tonne, €60/tonne is what I have heard from producers… There is no chance for another margin increase. It will just go up by the raw material movement,” said a customer.
($1 = €0.71)
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