Europe PET prices stabilise after initial January rise

LONDON (ICIS)–Domestic prices for European polyethylene terephthalate (PET) stabilised this week after a rise earlier in the month, sources confirmed on Friday.

The majority of players said PET was still available as low as €970/tonne, but some mentioned that the lower end had firmed to €990/tonne. The domestic prices for PET Bottle Grade are therefore €970-1020/tonne free delivery (FD).

At the start of this month, PET prices moved up in line with higher feedstock costs following the January contract settlements of upstream monethylene glycol (MEG) and paraxylene (PX).

Many market participants expect this price increase to take place in February and sources said that pre-buying activity had increased markedly as a consequence.

One producer said: “Whereas people maybe in the fourth quarter were happy to buy as of when, in the belief that tomorrow might be a cheaper day, I think it is clearer at the moment that tomorrow might be an expensive day. If you have the cash and the place to store material you might as well buy now.”

Those looking to buy PET for January delivery were therefore described as scarce.

One trader said that no volumes were booked this week as customers were waiting to see how the market develops next month instead.

Sources also discussed more general market trends such as the growing use of recycled polyethylene terephthalate (R-PET) as a lower-priced alternative to PET.

Typically, the price of R-PET is not as responsive to raw material and oil price pressures as PET.

Consequently, when PET prices rise, a price gap can open between the two products.

R-PET’s pricing trends do, however, often echo PET prices as the products compete directly in certain applications.

Players in both markets have noted that these movements have now begun to happen due to PET’s recent, sharp upward price direction.

One PET buyer expects R-PET transactions to become more expensive as demand for the product increases.