10 May 2012 17:24 [Source: ICIS news]
LONDON (ICIS)--The peak season for European polyethylene teraphthalate (PET) should be well underway by now, but economic uncertainty, a drop in the cost of crude oil and general malaise in demand is leading to customers staying out of the market, sources said on Thursday.
"If customers don't consume more PET, the high season will continue to be the low season," a producer said.
Buyers remain uncommitted and are prepared to wait before dipping into the spot market.
"I am not buying any [imports] for June because I haven't sold any," a customer said, adding that it had purchased PET at €1,280/tonne ($1,662/tonne) FD (free delivered) NWE (northwest Europe) for May.
Just when buyers traditionally bulk up on stock in time for the PET bottling season, prices started to drop. PET prices have been falling since the end of February/early March when levels were around €1,400/tonne.
There was a steep climb from the low €1,200s/tonne in January when customers, expecting prices to continue to increase as the season approached, pre-bought material on a large scale.
"How long can people not buy?" a second customer asked. "The general economic gloom has gathered pace," he added.
There are those players that believe customers have to restock at some point and anticipate slightly higher prices in June and July.
"June [prices] should be slightly higher than in May, depending on restocking," a second customer said.
Meanwhile, producers try to maintain or gain margin, following a month of slight relief from upstream paraxylene (PX) and monoethylene glycol (MEG).
($1 = €0.77)
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