Europe PET prices higher as players prepare for March

LONDON (ICIS)–The higher end of the European polyethylene terephthalate (PET) domestic price range have firmed, with prices above €1,080/tonne representing March delivery, sources said this week.

The domestic price range for bottle grade PET is €1,060-1,100/tonne FD (free delivery) Europe.

Expectations that March prices would increase due to upstream pressure have been held by market participants since the middle of this month.

Some producers even said earlier this month that they had low stock for February, adding this week that they had already begun business for next month.

As March contract settlements for raw materials monoethylene glycol (MEG) and paraxylene (PX) are yet to happen, some customers have made purchases in preparation for a rise.

The subsequent higher price they would have to pay has not been accepted by all participants, and more of them are putting forward the opposing view – that a price climb for PET will not materialise next month.

A range of reasons for this viewpoint have been offered by these sources, from the relative stability of oil prices since the start of the year to the recent softening of Asian raw material prices.

Nevertheless, in spite of these disagreements, the market does mostly hold a consensus on the tightness of PET in Europe.

Even though imports are becoming more competitive, they were absent from the market for a long duration of time and domestic volumes were drained by consumers as a consequence.

Players say that this lessened availability will not be helped by Indorama Venture Limited’s upcoming turnaround at its PET plant in The Netherlands, which is scheduled to occur in the second quarter of this year.

The force majeure announced on 16 February by UK chemical major BP on its Belgian purified terephthalic acid (PTA) plants, on the other hand, is yet to take effect on the market, sources said.

Although BP has not announced when its repair work is due to be completed, PTA and PET market participants have been told it would be before the 27 February.

There is a general worry in these markets that if repairs are not completed on time, availability issues will arise.