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European PET market unresponsive to turnaround season

by ChemOrbis Editorial Team -
  • 07/10/2014 (16:57)
European PET suppliers are seeking to maintain their prices at the beginning of October. Despite the turnaround season in the region, the market dynamics appear to be balanced as supply is sufficient for now while demand remains muted. Imports are also lacking buying interest due to the depreciation of the euro against the US dollar.

A Central European producer concluded some October PET deals with rollovers both in Italy and West Europe. A producer source reported that demand is weak and added that prices may post slight decreases later in the month.

A South European producer also left their PET prices unchanged for October. A source from the producer commented, “We didn’t lower our prices considering the weak euro/dollar parity. However, we don’t exclude conceding to small reductions of €5-10/ton in the upcoming weeks depending on the demand situation.”

Although producers are seeking to maintain their prices at the beginning of the month, softening expectations persist on the buyers’ side in line with the weak upstream markets. Spot PX prices in Europe declined by over $50/ton over the past week. September MEG contracts settled with decreases of €23/ton at €920/ton FD NWE last week while the October settlements are awaited for both products.

A packaging producer in Germany reported obtaining discounts of €30/ton on his September PET deals. The buyer commented, “We expect our supplier to lower their prices further this month considering oversupply. PET prices may hit the €1000/ton threshold.” Another German buyer reported seeing steady demand for his end products and added that he projects further softening for PET considering lower feedstock costs and the new capacities across Europe.

A recycler in Italy reported, “Suppliers are tracking different pricing strategies. Some of them who have high stocks are mulling over issuing discounts of €10-20/ton while others are targeting to maintain their offers. Imports are not competitive anymore due to the weak euro/dollar parity. Another converter added, “We expect to see a stable to slightly softer trend this month. Demand is sluggish and PET prices may hit the €1000/ton threshold in November.”

Lithuania’s Neo Group shut one of two lines at their 310,000 tons/year PET plant in Klapeida at the beginning of October. The line will remain offline for six weeks until the middle of November. Spain’s Novapet’s 130,000 tons/year PET plant in Barbastro was also expected to remain offline until the second half of November for a 50-55 day turnaround. Market sources reported that Indorama would also conduct a three week long shutdown at their Rotterdam PET plant at the same time as Novapet in October.

Meanwhile, Equipolymers delayed their planned maintenance shutdown at their Schkopau plant in Germany to the end of October. The 150,000 tons/year PET plant had initially been scheduled to be taken offline in the middle of October. The shutdown will take place at one of two lines and it will last for five or six weeks until early December.

All of these planned shutdowns, however, have failed to boost the sentiment in the PET market for now considering limited demand and sufficient availability. In addition, the new capacities that came online over the past year in Europe, Turkey and Egypt are expected to make up for the reduced output. JBF Industries was expected to start up their second 216,000 tons/year PET line in Geel, Belgium at the end of September. The first line has been operational since the middle of June.
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