01 November 2012 15:56 [Source: ICIS news]
LONDON (ICIS)--European polyethylene terephthalate (PET) producers are targeting a price increase in November in an effort to keep up with raw material costs, sources said on Thursday.
"It is highly likely there will be raw material increases in November which means that European PET producers will need to increase their prices," a producer said.
This matches comments made by other industry players, many of whom anticipate a rollover to a slight increase from October's €1,190/tonne FD (free delivered) NWE (northwest Europe).
PET's secondary feedstock, monoethylene glycol (MEG), has only just had an October contract settlement of plus €20/tonne to €1,095/tonne FD NWE, and November discussions are yet to begin.
However, initial speculation provided by buyers sees a rollover or a slight decrease in November, but there have been no comments from suppliers.
While there is continued strength or at least only small decreases upstream, PET demand is slow and producers have been fighting to maintain margins.
"I expect an increase in raw materials for November and we have announced an increase [on PET] of €30/tonne, but demand is very low," a second PET producer said.
Operating rates at those PET plants that are still running, have been reduced to around 65% because of the fact that PET prices are so close to variable costs, according to sources.
The latest import offers are not far off current European prices and therefore not particularly competitive considering the destocking that normally occurs going into year-end.
In theory producers need to increase prices in November, but if they do, they open up opportunities for importers, a third producer warned.
Freely negotiated October contracts were agreed at €1,250-1,300/tonne FD Europe. Domestic prices were heard below this for delivery in October and November.
($1 = €0.77)
Follow Caroline Murray on Twitter
Please visit the complete ICIS plants and projects database
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections