US October PET prices expected to land short of nominated hikes

11 October 2012 23:35  [Source: ICIS news]

HOUSTON (ICIS)--US polyethylene terephthalate (PET) prices for October were expected to land well below the 6 cents/lb ($132/tonne, €103/tonne) increases sought by producers, market sources said on Thursday.

Sources said soft demand and market uncertainty were likely to lead to increases that are less than what producers had announced in September.

Some said the October PET price hike would be 3-3.5 cents/lb and others said it would be 3.5-4 cents/lb. Still others said the increase may only be 2.5-3 cents/lb, with 3 cents/lb being the maximum increase.

“I’m with the masses regarding the 6 cents/lb increase. It is unlikely. The soft demand combined with the availability of imports makes anything other than raws +/- .3 extremely unlikely,” said one market participant.

“I don’t think it [6 cents/lb] is going to push through. The price increase could be less,” said another market participant.

Current PET prices were at 81-86 cents/lb.

“Producers will have decent opportunity to recover raws [raw material costs]; I don’t think they’ll lose any margins. But there is tremendous weakness out there from every standpoint, it seems,” another source said.

The level of price PET increase is also dependent on spot Asian movements in paraxylene (PX).  PX is a feedstock for purified terephthalic acid (PTA), which is a direct principal feedstock for PET.

October prices are considered volatile because feedstock costs continue to rise. Meanwhile, the October US PX contract remains unsettled, delayed by both China’s national holidays during the first week of this month and a chemical trade conference in Europe.

Some sources said they did not expect to see the US October contract for PX settled until mid-month, or even later.

US PET prices were assessed up by 4 cents/lb for September based on higher feedstock costs and firming market trends in Asia.

PET producers in the US include DAK Americas, Indorama, Mossi & Ghisolfi (M&G) and Nan Ya Plastics.

($1 = €0.78)

By: Feliza Mirasol
+1 713 525 2653

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