INTERACTIVE: US PET prices rise amid tight supply, volatile feedstocks

HOUSTON (ICIS)–US polyethylene terephthalate (PET) prices rose by 2 cents/lb ($44/tonne) in August against a backdrop of raw material volatility and tight resin supply.

High demand persists as peak-consumption season remains in effect, and the market continues to be event-driven amid tight supply of both PET resin and key feedstocks.

“No one is going to upset the apple cart,” a source said regarding August’s increases. “No one has much leverage right now. You pick your battles, and now’s not the time.”

Key feedstock purified terephthalic acid (PTA) has been tight all summer because of production issues, both at BP in the US and most recently at Alpek’s plant in Altamira, Mexico, which went down on 15 July after a fire.

BP’s production has been normalising, but the Alpek plant remains off line and is not expected to be running again until mid-September. The company is working to mitigate impacts of the two-month outage.

“As soon as they bring half of it back on, we’ll see some nice relief,” a source said.

Another source said that August has been manageable feedstock-wise despite the outage but that it could become an issue in September if Alpek’s target restart date is not achieved.

“The industry is not prepared,” the source said regarding consequences if the restart is delayed.

In a market largely driven by events over the last year, there remains a sense of anxiety although demand will wane as peak season winds down.

The restart of a West Virginia resin plant by new player Far Eastern New Century (FENC) has provided some supply relief.

“It was perfect timing for FENC to walk to the door and replace that volume,” a source said.

Still, prices remain about 20 cents/lb higher year on year, and imports continue to be challenged amid an antidumping probe and subsequent preliminary duties.

Imports are 42% higher year to date compared with 2017, according to the International Trade Commission (ITC), but at elevated prices compared with last year.

Demand will wane as peak bottle drink season concludes, and supply will continue to lengthen in the US as FENC ramps up.

Further out, the stalled PET/PTA plant in Corpus Christi, Texas, is not likely to begin producing PET before 2020 and PTA lines would follow in 2021, Indorama has said. The project’s sale to Indorama, Alpek and FENC awaits FTC approval.

Major producers of US PET are Indorama, DAK, Nan Ya and FENC.

Focus article by Amanda Hay