02 May 2013 16:55 [Source: ICIS news]
LONDON (ICIS)--The price of polyethylene terephthalate (PET) in Europe in May is unlikely to move far from where it landed at the end of April, sources said on Thursday.
"We don't expect to pay more in May. We are convinced we don't get a price decrease, but we won't pay more," a PET converter said.
Producers' margins have been dire for months as feedstocks soared while downstream demand flagged.
April though, saw raw materials fall and PET producers hold onto some margin.
The weak economy and poor offtake led sellers to reduce output and balance out the market. Competitively priced imports are not due to reach Europe until June, so European producers may take advantage of this and keep prices relatively steady.
"PET could roll over, plus or minus, depending on the next few days. I don't see prices crashing or moving up by €30-50/tonne ($40-66/tonne)," a producer said.
Upstream paraxylene (PX) is difficult to gauge in Europe as no Asian contract settlement has been reached as yet. Currency will also factor into discussions in Europe.
"PX is dictating everything… I dont think our industry can afford to have high PET prices. It's not sustainable," a buyer of PET said.
The first few days of May have so far been dominated more by talk of demand and supply, rather than upstream volatility.
"There is more or less a disconnect between feedstock and the PET market. Last month the raw material decrease was higher than the PET decrease. This month PET is more or less a rollover, regardless of what is happening with feedstock pricing," the converter surmised.
($1 = €0.76)
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