19 April 2012 14:05 [Source: ICIS news]
LONDON (ICIS)--Thailand's Indorama Ventures has pushed the completion of its polyethylene terephthalate (PET) capacity expansion in Rotterdam, the Netherlands, from the second quarter to June or July 2012, a company source said on Thursday.
"Rotterdam will be… June [or] July," he said. The PET unit currently has a total capacity of 200,000 tonnes/year, and this will be boosted to 390,000 tonnes/year once the expansion is complete.
The announcement has come at the best possible time as demand is unusually slow, according to several sources.
"It is the best that could happen at the moment. They can't sell volumes now," one customer said.
"August is our best estimate [for when the expansion will come on stream]," a second industry participant said, adding that with the PET campaign ending around that time, it is unlikely that the market will notice the new capacity this year.
Following hefty pre-buying activity in the first quarter – when prices rose steadily ahead of the peak season and amid concerns about upstream availability – requirements dropped as March progressed. This trend continued into April.
"There has been a complete stop in sales and big resistance from customers," according to a second manufacturer, which warned of a potential cutback in production should this situation continue.
Consequently, prices have dropped from highs of €1,415/tonne ($1,862/tonne) FD (free delivered) Europe in early March to about €1,300/tonne in April, according to ICIS data.
The market is surviving hand-to-mouth because inventories are so low. However, there are pockets where improved demand is beginning to emerge.
"Demand is up from our side… Euro 2012 is coming," another customer commented, adding that there is hope of improved drinks sales during the football season.
Indorama Ventures had originally planned to complete the expansion by the end of 2011.
($1 = €0.76)
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