Europe PET price stabilises going into Feb after Jan fall

LONDON (ICIS)–The European polyethylene terephthalate (PET) price came off in January, but may have stabilised or even risen from the very low prices going into February, sources said on Friday.

“The market is in turmoil, sudden demand as customers are getting caught in the sudden turn around. Weak euro has knocked out imports,” a supplier said.  

Whether or not this is the beginning of a change in price direction remains to be seen.

“It seems now in the short term, suppliers are confident that the lowest point has been reached and they think about price increases,” a customer said.

There has not really been a structural change in dynamics, so while suppliers promote the idea of possible price increases, buyers’ cautious attitude is still very much alive. Indeed, there are still areas where buyers are waiting for prices to drop further.

“There are still a lot of bids at the lower level [€820/tonne], but no acceptance,” a supplier said.

The pressure of crude oil crashing brought with it price depression downstream in January. PET buyers held back as each tonne bought was more expensive than the next, and suppliers tried to hold their nerve but did not always manage to hang on to margins.

Shutdowns in the south helped maintain the presence of €900/tonne FD (free delivered) Europe, but occasional deals elsewhere even hit €820/tonne.

The devaluation of the euro has also kept fresh imports at bay.

“We did some deals because it was the bottom of the market, then everything changed with the exchange rate and now it is not making sense to buy from Asia or the Middle East because of the US dollar and euro exchange rate,” a customer surmised.

Either side of €860/tonne eventually became the norm for many across Europe in January.

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