28 July 2011 17:50 [Source: ICIS news]
“[Our] August price is plus €100/tonne ($143/tonne)… if they do not like the price I do not sell,” a producer said, adding that his target price is €1,400/tonne FD (free delivered) Europe.
Other buyers and sellers are speculating on a more modest increment of anywhere from €20–40/tonne, or possibly more depending on where feedstocks land in August.
“I believe the August price could increase a bit,” said a second producer.
Expectations of higher feedstocks and a scarcity of imports have led industry players to talk about prices having bottomed out mostly in the €1,200s/tonne.
Paraxylene (PX), the raw material for PET’s main feedstock purified terephthalic acid (PTA), looks set for a hike of €60–100/tonne in August, according to PET and PTA players.
This, plus a possible increase on monoethylene glycol (MEG), could result in PET production costs going up by around €50/tonne in August. These are just estimates and some players anticipate that MEG will decrease or roll over, but sources still speak of PET prices having bottomed out.
“[An increase] will be mainly driven by feedstocks,” a customer said, echoing comments made by other sources.
Some on the buy side said that a rollover may be on the cards, but a decrease is out of the question if feedstocks rise.
Poor weather conditions across much of Europe have stifled demand, buyers and sellers agreed, although some sellers still say overall sales are good and operating rates are high.
“Imports start decreasing now. Demand is quite OK,” a third producer said.
Prices have been decreasing since May, mostly in line with what has been happening upstream, and also because of an influx of competitively priced imported material, but this has since waned.
“There is no valid argument for further decreases,” said a reseller.
Discussions are continuing.
($1 = €0.70)
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