03 August 2011 05:48 [Source: ICIS news]
Offers from two Chinese producers advanced to $1,700-1,720/tonne FOB (free on board)
PET offers in Asian on Wednesday were up $50/tonne from the start of the week, while some sellers refrained from making offers given the ongoing instability in raw material costs. Market sources expect one PET producer will likely resume offers this afternoon at $1,720/tonne FOB NE (northeast) Asia.
Prices PET feedstocks paraxylene (PX), purified terephthalic acid (PTA) and monoethylene glycol (MEG) continued to rise.
Asian MEG prices advanced to $1,280-1,285/tonne CFR China on Tuesday from Friday’s close of $1,225-1,235/tonne CFR China. Glycol prices were spurred by supply concerns after a weekend blaze at a propylene pipeline at Taiwanese Formosa group’s petrochemical complex in Mailiao.
Co-feedstock PTA, meanwhile, jumped to $1,245-1,275/tonne CFR China by Tuesday from Friday’s close of $1,190-1,222/tonne CFR China, following a surge in PX prices on Monday.
On Friday, the August PX Asian Contract Price (ACP) was settled at $1,540/tonne CFR Asia, up by $140/tonne from the settlement reached for July.
PET makers such as
Selling ideas for PET were heard at $1,670-1,700/tonne FOB or higher on Wednesday. One producer may resume offer on Wednesday at $1,720/tonne FOB NE Asia.
“It is a difficult time to make either selling or buying decisions. We are not sure by how much we should increase prices [in order to cover costs],” said a northeast Asian PET producer.
The strong uptrend in raw material prices spurred successive price hikes by Asian PET producers in the past two weeks. But the speed of the raw material price increase presented further difficulty for PET producers who hesitated to raise prices by the same extent.
“Our feedstock costs have gone up to about $1,550/tonne based on spot PTA and MEG prices,” said a second northeast Asian PET maker.
Asian PET producers export within the region as well as to other markets worldwide, including the North and South Americas, Europe, the Commonwealth of Independent States (CIS), the Middle East,
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 below $1,660-1,680/tonne FOB and are concluding deals in increasingly smaller volumes, they said.
“Feedstock is a real headache for us. But bids are not going up as quickly and it’s becoming more difficult to sell our product,” the first northeast Asian producer said.
Other major Asian PET makers include
“Our customers understand that our costs are rising but they are also worried about committing to larger volumes at today’s high prices,” said the second PET producer. “We have to closely monitor feedstock prices every day. There is too much uncertainty ahead.”
($1 = €0.70)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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Asian Chemical Connections