Updated to mid-November 2009
Asian market review by Yu Guo, ICIS pricing
Asian polyethylene terephthalate (PET) prices remained cost-driven entering the third quarter of the year. Market players kept a keen eye on the feedstock purified terephthalic acid (PTA) and monoethylene glycol (MEG) values and tracked the changes closely in the upstream markets.
Spot prices softened during August and September and reached a low of $1,010/tonne FOB (free on board) Korea in the first week of October, in line with raw material prices. However, prices staged a sharp rally following the unexpected upturn in the feedstock markets after the end of China’s week-long National Day holidays.
In late October and early November, spot prices continued to trend up, tracking feedstock numbers. Major producers maintained strict price discipline citing constant erosion in margins while buyers remained cautious and procured in small lots given the uncertainty in the upstream markets.
European market review by Caroline Howard, ICIS pricing
The European PET market in August demonstrated typical traits expected of the traditional high season, as demand and prices both rose. European producers managed to increase values by around €30/tonne at those accounts which had enjoyed competitive prices in July. Some of the very high values noted particularly in Spain, however, came off their peak. Overall, prices landed in a consolidated range of €930-980/tonne FD (free delivered) Europe.
Producers continued in their quest to increase margins and with news of firming feedstocks, proposed higher PET prices for September, too. The result was a mixture of rollovers and €10-50/tonne hikes.
By October, customers managed to push for significant decreases, this being the end of the season. Domestic prices fell by €75/tonne and €850-920/tonne was the eventual range the market was working with.
The outlook for November was firm. Strong crude and feedstock values supported arguments for stable or higher domestic PET prices. Stocks were low for both customers and suppliers, particularly as customers had been holding off on purchases in anticipation of prices falling further. The gamble for buyers was whether or not to buy Asian material which would not arrive until December, in a potentially firming market.
US market review by Landon Feller, ICIS pricing
August PET contracts increased by 3 cents/lb ($66/tonne) in the US and a little more than 1 cents/lb in September before falling in October on the back of lower costs and weak demand.
The deflationary trend that carried average October bottle-grade resin values down into the mid-60 cents/lb range was overwhelmed by bullish momentum in the energy sector in late October.
With PET raw material costs posing an uncommon fourth-quarter rise, November contract prices were nominated higher by 2-3 cents/lb. Buyers, traders and market observers predicted that November contract prices would rise by around 1-2 cents/lb but not more.
Major US producer Eastman Chemical announced in late October that it would conduct a fourth-quarter maintenance turnaround on its plant near Columbia, South Carolina.
Buyers and sellers speculated that a major PET producer in the US would close capacity in the coming year, and widely predicted that it would be one of the three non-fully integrated producers.
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Polyethylene terephthalate
Uses and Outlook
Polyethylene terephthalate (PET) exists both as an amorphous (transparent) and a semi-crystalline (opaque and white) thermoplastic, and can be made into either a resin or a film. The semi-crystalline PET has good strength, ductility, stiffness and hardness while the amorphous PET has better ductility. PET also has good processability and can be recycled for other applications such as polyester fibres.
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Polyethylene terephthalate
Process Technologies
PTA and MEG are reacted to make a basic ester which is polymerised in a melt phase, polycondensation finishing reactor operating under heat and vacuum. The molten polymer is extruded, cut into chips and cooled. The chips pass to a solid state polycondensation unit which can be considered an annealing process to form the resin. Both continuous and batch process are available for the polymerisation.
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