31 January 2013 12:22 [Source: ICIS news]
"There is no cheap material available," a customer said.
Even imports already in traders' hands are priced in line with domestic PET, at more than €1,300/tonne ($1,757/tonne) FD (free delivered) Europe.
Spot and contract PET prices have merged as sellers have little room to manoeuvre due to increasing production costs around the world.
The February Asian paraxylene (PX) contract price was settled on Thursday at $1,685/tonne CFR (cost and freight) Asia, $60/tonne over January.
This is bound to impact European PX, which in turn will affect the cost of PET production so there seems to be no letup in the pressure from raw materials.
Even before this news, PET was in the market for €1,320-1,330/tonne, and up to €1,340/tonne was also mentioned. This is an increase from the €1,270-1,280/tonne lows seen in early January.
"Customers are collecting offers from Europeans and importers. The reaction from almost everyone is that they are not prepared to pay this level," according to a reseller.
There may not be a choice but to pay these prices however, as unconfirmed talk of plant maintenance schedules clashing with no cheap imports create a firm environment.
"[European producers] are short of material," a second buyer said, adding that consumption is bad.
An early January rush to restock, larger customers prebuying in the fourth quarter for the first and global economic woes could dull demand further, but this remains to be seen.
($1 = €0.74)
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