Europe PET prices reach bottom, January sentiment bullish

22 December 2011 16:13  [Source: ICIS news]

LONDON (ICIS)--The price of European polyethylene terephthalate (PET) has reached rock bottom and is expected to increase in January, sources said on Thursday.

“January will go up, there is no doubt. Maybe by €30-40/tonne ($39-52/tonne),” a producer said.

Expectations of firming raw materials and the need to recuperate margins are the drivers for the more bullish sentiment towards pricing in the new year.

Customers agree, although say there is no definitive trend for the first quarter.

“Prices are likely to go up a bit because everything has dropped so much,” one buyer said. He added that this will only be the case should demand prove to be there in January.

A second buyer said that 2012 would probably start at the same or at least similar prices to the end of 2011 because of lacklustre demand.

Meanwhile, the cost of making PET in December fell by around €70/tonne, but producers managed to claw back some margin with freely negotiated contract agreements.

As prices hit rock bottom and suppliers stopped offering at the very low numbers seen in early December, the price bracket began to narrow from €1,230-1,290/tonne FD (free delivered) Europe in November to €1,220-1,250/tonne. This includes some limited spot activity as well as monthly agreements.

“Some of the higher prices have come down,” a third producer said.

($1 = €0.77)

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By: Caroline Murray
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