HOUSTON (ICIS)--Latin America polyethylene terephthalate (PET) prices are still rising on the strength of high demand for bottled drinks in the northern hemisphere, heading into this year’s National Plastics Exposition (NPE).
PET prices in Asia have an impact on Latin America’s PET prices by means of formulae that market players use in pricing.
High demand in Europe and rising prices in Asia continue to be the drivers behind the latest uptrend.
PET markets in Latin America are still feeling the impact of the Mossi & Ghisolfi (M&G) plant closures and auctions that have curtailed supply in the entire American continent.
Activity in the US Gulf is also an important factor in the region, but more so for Mexico, because of the North America Free Trade Agreement (NAFTA).
Prices have risen in the region under the influence of Asian price direction, but also because of the perceived scarcity of PET and the unresolved production issues.
In addition to the US, M&G had plants in Mexico and in Brazil that put out an important volume of PET in those markets.
In Brazil, producer Alpek kept the Brazilian plant running, easing supply concerns. In the end, producer Indorama Ventures Public Company Limited (IVL), entered into an agreement to acquire PET producer M&G Polimeros Brazil SA in Ipojuca, Brazil.
The plant is the largest PET facility in Brazil, with capacity of 550,000 tonnes/year. This plant is strategically located and benefits from virtual integration with a manufacturer of purified terephthalic acid (PTA), a key feedstock to PET.
The Administrative Council for Economic Defense (CADE), the regulatory authority in Brazil, has given the green light to this acquisition, according to local sources.
In the US, Alpek, Indorama and Far Eastern New Century (FENC) entered a joint venture to acquire the M&G Integrated PTA-PET assets currently under construction in Corpus Christi, Texas.
The Corpus Christi project is an integrated PTA/PET plant currently under development that, when completed, will have nominal capacity of 1.1m tonnes/year of PET and 1.3m tonnes of PTA. The plant is expected to be the largest single line vertically integrated PTA/PET production facility in the world and the largest PTA plant in the Americas.
It is not clear yet what will be the fate of the Mexican M&G plant. Local PTA producer Alpek is a likely candidate to acquire the M&G assets in Mexico.
PET markets in the Americas, formerly struggling with oversupply, are expected to be tight for the remainder of this year.