Europe PET players mull over further price hikes in June on tightness – European polyethylene terephthalate (PET) players are considering June spot prices as sellers announce further increases due to high demand during a period of tightness – Europe PET price hikes June - Arhive

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Europe PET players mull over further price hikes in June on tightness

Source:ICIS News

LONDON (ICIS)–European polyethylene terephthalate (PET) players are considering June spot prices as sellers announce further increases due to high demand during a period of tightness.

Europe PET price hikes June Another purified terephthalic acid (PTA) force majeure, at Hanwha General Chemical in South Korea, is expected to contribute to the ongoing constraints for PET producers next month.

Due to supply shortages and strong demand during May, spot prices have posted triple-digit hikes.

PET spot prices are currently priced at €1,215-1,350/tonne FD (free delivered) Europe.

Deals close to €1,400/tonne FD were done towards the end of the month, according to sources, though the majority of market participants noted spot prices had not exceeded €1,350/tonne FD for May delivery.

The ICIS assessment valued PET contract prices for May at €1,150-1,350/tonne FD (free delivered) for bottle grade in east and west Europe, as well as film grade in west Europe.

The contract price table refers to the minimum and maximum freely negotiated domestic deals recorded for deliveries concluded during the named month including the week leading to it, up to and including the last Friday of the month.

Players have begun discussing June spot business, with some sellers settling deals at €1,350-1,400/tonne FD.

However, sources have mixed views regarding the possibility of further increases next month.

Some players view €1,350/tonne as a rather high price level, while others see this as merely the starting point for June price negotiations.

Further feedback is pending.

Spot buyers are struggling to find volumes, while one contractual PET buyer was requested to take smaller quantities from its supplier this month.

“There is no availability. It cannot get worse as far as demand goes. Demand will only get higher,” said one buyer.

One trader said June spot offers were not forthcoming as producers are unsure about targets and availability moving forward.

“What we see is that some of the producers are not able to offer [product] because of availability and even for June/July they don’t want to offer because they don’t know which price. It’s an unseen situation,” said the trader.

Sources expect tightness to persist in the European market until September.

With Asian imports limited and deliveries not expected until July or August at the earliest, sources say buyers have “no alternative” than to purchase European spot at this premium.

One PET producer has priced its freely negotiated contracts at €1,350/tonne for June, stating it will adjust its prices according to demand during the month.

The seller added it would not sell spot material below €1,450/tonne FD for June.

Meanwhile, BP’s force majeure on PTA production at Geel, Belgium is ongoing, according to sources.

JBF’s force majeure on PET continues and is expected to remain in place until the end of the month, a company source confirmed on Friday.

Novapet has been forced to reduce its production rates in Spain to a technical minimum as a result of BP’s PTA force majeure.

Additionally, due to PTA shortages Equipolymers has had to reduce its customer allocations and has no available spot material at present.

The PET producer is expected to return to full capacity next month, according to a company source on 25 May.

With supply short during peak demand season, and no clear relief expected in the short-term, bullishness is expected to continue on the sell side during June.

Europe PET price hikes June

PET is used in fibres for clothing, containers and bottles for liquids and foods, thermoforming for manufacturing, and in combination with glass fibre for engineering resins.

Picture source: Ulrich Niehoff/imageBROKER/REX/Shutterstock

By Eashani Chavda

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