US polyethylene terephthalate (PET) monthly negotiated prices for June are expected to increase as producers seek to regain lost ground following the recent shake-up when prices were suspended because of delayed settlements in upstream paraxylene (PX) and purified terephthalic acid (PTA), sources said on 5 June.
Producers have announced 2.0 cents/lb ($44/tonne) price increases for June PET, citing a need for an increase on the back of the higher May PX/PTA contract pricing and the fact that raw materials settled at slightly higher prices in late May as well. A seller and buyer both said that they do not expect the full increase to go through. The seller expects June to see a 1.5 cent/lb rise, while the buyer expects to settle at a 1.0 cent/lb increase.
Market participants expect June PET prices to be finalised around the third week of the month, with some initial settlements coming in earlier than that.
One producer also cited stronger PET spot prices in Asia, which puts upward pressure on US prices. Another producer said that a price increase is needed to cover ground lost in April due to the unexpected split settlement in PX and the increase in raw material prices for May.
A third producer noted that the market got “really messed up” in April because of the lack of feedstock contract settlements. PX and PTA April contracts finally saw a split settlement in mid-May, and May contracts were finally settled at the very end of that month.
US PET monthly negotiated prices for May were assessed steady to up. Prices were assessed by ICIS at 80.50-85.00 cents/lb stretch blow moulding (SBM) DEL (delivered). Some participants said that their May PET price rolled over from April. Other participants settled their May prices at an increase of 0.5-1.0 cents/lb.
Demand, meanwhile, is lower than it should be at this time of year, due mainly to the fact that the peak PET season has not hit as strongly as expected. Participants attribute this to lingering cool weather in the US that has dampened consumption in the downstream beverages market.
Other market participants remain optimistic that June will be the month when the PET peak season really hits.