European PET buyers hesitant to boost inventories as they expect falling prices in April, driven by slower upstream markets, lower contract prices for feedstocks
March 21, 2013
(Industry Intelligence Inc.)
– European polyethylene terephthalate (PET) buyers are hesitating to boost supplies amid expectations that prices will drop in April because of slower upstream markets and falling contract prices for feedstocks, according to sources, Platts reported March 21.
After months of feedstock price hikes, they have fallen in March and could continue down that road in April—developments that have prompted customers to take a wait-and-see approach, Platts reported.
One producer said that prices have been slow to settle in March in anticipation of the final settled prices of feedstocks. In March, PET feedstock paraxylene has fallen €1,250/tonne (US$1,616/tonne) in Europe, down €10/tonne from February, driven by a significant downturn in Asia where prices have continued to decline.
Another key PET feedstock monoethylene glycol has settled on March 20 at €1,070/tonne, marking a fall of €35/tonne from February. Prices for this raw material are expected to continue falling in April.
Despite the drop in feedstock prices, PET producers are resistant to pass on the savings to customers as they aim to recover margins lost from 2012.
While much of the March settlements in PET have been rollovers, buyers have reported getting reductions. They have also estimated that rollovers in April would be difficult if prices fell at that time. Converters have also hesitated from buying imports due to anticipated lower prices in Europe.
The primary source of this article is Platts, New York, New York, on March 21, 2013.