Asian PET producers hike August offers on higher feedstock costs

28 July 2011 04:55  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s polyethylene terephthalate (PET) bottle chip producers have increased their offers by $30-50/tonne (€21-35/tonne) this week to $1,650-1,700/tonne FOB (free on board) Asia in line with a rise in feedstock values.

PET makers including South Korea’s KP Chemical and Taiwan’s Far Eastern Textiles raised offers on Monday and Tuesday on the back of a rise in the prices of raw materials paraxylene (PX), purified terephthalic acid (PTA) and monoethylene glycol (MEG).

Asian PET producers export to markets worldwide, including North and South America, Europe, the Commonwealth of Independent States (CIS), the Middle East, Africa as well as within the region.

Pressured by escalating feedstock costs and anxious to protect narrowing margins, producers raised offers for August cargoes to $1,620-$1,650/tonne FOB Korea and $1,650/tonne FOB Taiwan last week. Two Korean producers halted offers altogether last Friday given the unpredictability of raw material costs.

“Asian PTA and MEG prices are transparent and our customers can see that PET conversion costs are going up,” a northeast Asian PET producer said late on Wednesday.

“If we don’t follow the feedstock price increase, our margins will suffer and we may end up having to cut back on production.”

PTA prices closed higher last Friday at $1,175-1,200/tonne CFR CMP (China Main Port). MEG prices also increased by $25/tonne during the week to settle at $1,200-1,205/tonne CFR CMP last Friday.

Another northeast Asian producer boosted its offers for PET to $1,700/tonne FOB from Monday, to cover the projected increase in raw material prices, as it expects the Asian Contract Price for PX in August to settle $150/tonne higher than July.

“If PX rises by $150 in August, PET will need to increase by $85 from July levels for us to maintain our margins,” the producer said.

However, buyers in some of the key markets have been reluctant to accept the price increases, said several producers surveyed this week. Producers have declined bids from the Middle East and Europe at or below $1,600/tonne FOB, they said.

Major Asian PET makers include China’s Jiangsu Sanfangxiang, India’s Reliance Industries and Thailand-based Indorama.

($1 = €0.70)

Please visit the complete ICIS plants and projects database


By: Trisha Huang



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index