HOUSTON (ICIS)--US polyethylene terephthalate (PET) domestic prices have been on a downtrend in the first quarter of the year, following falling feedstock and raw material costs in recent months.
Buyers and sellers have been settling their PET prices late in the month because of uncertainty in Asia, which US PET players typically monitor for price direction.
Demand for PET is on the uptrend heading into this year’s International Petrochemical Conference (IPC), as market players prepare for the ramp up in the downstream beverage bottle-making sector, which runs through its strong season in March to August, tied to the increased consumption of bottled beverages during warm weather.
However, PET pricing is expected to continue following trends in feedstock and raw materials, which will be the main driving force, rather than supply and demand, market sources said.
Global oversupply of PET is expected to keep the US market depressed in 2014. As pricing will move solely with the trends in feedstock and raw materials, producers will not be able to gain margin, market sources have said.
However, price settlements have been challenging in the last two months, with buyers and sellers generally settling their prices at the very end of the month. Price talks have lasted longer than usual as feedstock paraxylene (PX) US contract price settlements lagged for much of February and March, in the absence of price direction from the PX Asian Contract Price (ACP).
The PX US contract price typically follows trends in the PX ACP, but there has been no major settlement in the PX ACP in February and March. Consequently, US PX pricing was pushed in the direction of Asia PX spot price trends in addition to raw material pricing, market sources said.
A trader source said that Asian import prices started rebounding, and it does not see many cargos coming as imports to the US in recent months, since the arbitrage gap was not that big lately.
Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place 30 March-1 April in San Antonio, Texas.