04 January 2013 07:03 [Source: ICIS news]
SINGAPORE (ICIS)--Prices of polyethylene terephthalate (PET) in the Middle East have risen by 4.8% in the past month, supported by rising feedstock costs and snug supply, suppliers and buyers said late on Thursday.
PET prices in the region rose by $70/tonne (€54/tonne) from a month earlier in the week ended 3 January to $1,500-1,540/tonne CFR (cost and freight) GCC, ICIS pricing data showed.
“Demand in the Middle East has been quite weak since November, with the onset of winter, but cost pressures are so high that suppliers have had no option but to raise offers,” said a producer based in the Gulf Cooperation Council (GCC) region.
Winter is traditionally a low season for PET demand, as beverage consumption comes down during this period.
Snug supply caused by production cuts has left end-users with little bargaining power, said a Dubai-based trader.
“I have enough inventories to last me until February, so don’t need to buy at these high levels, but several other end-users need to restock soon,” said a Saudi Arabian end-user.
Octal only recently restarted one of its four PET lines at Salalah, Oman, a company source said, adding that supply to its customers was not disrupted because of the shutdown. The line had been shut in early December for repair and maintenance.
Following an expansion in August, Octal’s PET capacity has increased to 927,000 tonnes/year from 400,000 tonnes/year, making it the world’s largest PET producer.
Another major GCC producer was also heard to have cut production, though no confirmation was available from the producer.
The GCC region has a total PET capacity of 1.6m tonnes/year, whereas demand is only around 315,000 tonnes/year, according to industry sources.
Prices of feedstocks purified terephthalic acid (PTA) and monoethylene glycol (MEG) rose sharply on 31 December from 19 December to $1,170-1,185/tonne CFR China and $1,195-1,210/tonne CFR China, respectively.
The price rise was driven by positive economic data emerging in China and an expectation that the US fiscal issue would be resolved soon.
($1 = €0.77)
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