02 January 2012 20:10 [Source: ICIS news]
HOUSTON (ICIS)--North and South American polyethylene terephthalate (PET) prices are expected to firm through the first quarter of 2012, following a decline in resin and feedstock prices in the latter part of 2011, sources said.
The slow economic recovery will hold back the growth in purified terephthalic acid (PTA) and PET in 2012, but only in a relatively small sense, according to one major producer of paraxylene (PX), a feedstock for PET. The source expects PET to be among the top growing markets in 2012, whether it is a 10% growth in a recovered economic world or 5% in a slow world.
PET prices will gradually move upward, following an increase in polyester demand between January and February, market sources said. Raw materials account for 90% of the cost of PET, and raw material prices are affected mostly by polyester demand, according to one market player.
PX should be adequately supplied in 2012. New plants coming on stream – primarily in
Two major factors that will lead to higher prices following the Lunar New Year will be stable crude oil prices and the start-up of Chinese PX units in the second quarter of 2012, according to sources.
Market participants said the EU financial crisis will not affect overall PET demand, since any possible impact should be limited to specific regions.
The Asian market is a major driver in the
In Latin America, PET prices are expected to gradually rise through the first quarter of 2012 following the decline in resin and feedstock prices toward the end of 2011, sources said.
The probable scenario for Latin American is that PET prices will have reached bottom at year-end or by January 2012, lagging the trend in Asian markets. Although Latin American prices may linger at low levels in December and perhaps January, offers should start rising in the first quarter, in line with expectations in Asian markets, according to participants.
Although Latin America is not a monolith, where all countries react to global market forces in exactly the same way or at the same time, there is a commonality in the region’s response to dynamics in other regions, particularly in
Market participants in the
In addition, Mexican, Central American and Caribbean PET markets usually track the
However, price direction in
The PX ACP dropped from $1,655/tonne (€1,274/tonne) CFR (cost and freight) for September to $1,390/tonne for December, but PET prices in
In early December, however, spot PX prices in
For December, PET domestic prices fell by $60/tonne in
Latin America domestic delivered (DEL) PET prices for December stand at $2,040–2,140/tonne in Argentina, $2,120–2,190/tonne in Brazil, $2,290–2,390/tonne in Colombia and $2,190–2,260/tonne in Mexico, as assessed by ICIS.
If Asian PX and PET prices stabilise by January, as expected, PET prices in
Asian market direction is eventually a stronger driver in
The floods that ruined cotton crops last year in
In the US, cotton crops were damaged this year in
Additional reporting by Ron Coifman
($1 = €0.77)
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