Price and market trends: Europe PET balanced to tight, price ideas are mixed

08 May 2014 17:28 Source:ICIS Chemical Business

A combination of limited imports, recent and forthcoming shutdowns and cautious inventory management by both buyers and sellers, has resulted in a balanced polyethylene terephthalate (PET) market, sources said on 25 April.

Areas affected by the May shutdown in Poland are verging on tight.

“Poland and the east [of Europe] is a special case at the moment. We see higher prices really accepted because of the shutdown of Indorama,” a reseller said earlier in the week.

April started with prices decreasing from the highs seen in March. Imports lost their attraction and an initial upstream April paraxylene (PX) settlement at an increase helped spur PET sellers into targeting higher prices. Late in the week however, saw the rejection of the earlier initial PX price in favour of a confirmed rollover from March.

“[PET] buyers are reluctant to commit at this stage. They are waiting to take stock in terms of where raw materials will settle,” a third source said.

The April contract price for monoethylene glycol (MEG), PET’s secondary feedstock was also confirmed at a rollover from March to April.

Some PET sellers with new capacities have provided competition, pressuring prices, as have earlier import commitments, sources said. The market may become oversupplied once JBF in Belgium, Lotte Chemical UK and EIPET’s second line in Egypt come on stream. But so far this year, the European arena has not been as long as some players had anticipated.

“Producers keep inventories low and run at half capacity. They want to do that to make availability scarce,” a second customer said.

Over the course of April, freely negotiated prices decreased from March, and were confirmed at €1,030-1,090/tonne FD (free delivered) Europe.

By Caroline Murray