24 August 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--August polyethylene terephthalate (PET) prices increased from the lows seen in July to €1,230-1,280/tonne ($1,538-1,600/tonne) in August and sellers intend pushing for more increases in September because of demand and higher production costs, sources said on Friday.
"There were very different prices [for August, depending on] when you bought. At the very beginning you paid less and if you waited for a decrease, you got an increase," a producer said, adding that €1,280/tonne FD (free delivered) ?xml:namespace>
August prices rose from July when prices bottomed out around €1,100/tonne because demand was so slack. A sudden increase in upstream values then sparked a flurry of buying activity, leaving PET sellers that had low stocks already, sold-out.
"I have no kilo left. We are short on stock," a second producer said.
Much of what happens in September will depend on the euro/US dollar exchange rate, the second producer added.
"Definitely most of the [September] increase will be generated by [upstream] ethylene glycol…There will probably be a €20-30/tonne increase for September [PET]," according to the first producer.
Buyers acknowledged that there was little chance of a change in the price direction of PET before the end of September, or even October.
"September [upstream costs] will remain high for sure," a buyer said.
Suppliers intend pushing for further hikes in September when production costs are likely to go up again. Levels of €1,300/tonne and above have been mooted as sellers’ targets for PET.
The danger of pulling PET prices up to €1,300/tonne and more is that imports then become attractive once more, customers warned.
"The €1,300/tonne plus is wishful thinking for producers…if you want to go for a bigger margin, a [price] increase will only trigger imports," according to a second customer.
While there have been signs of good demand over several weeks, the European debt crisis is holding back market aspirations of the situation improving over the course of the next few months.
($1 = €0.80)
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