European PET players eye firming trend in Asia
In Asia, spot MEG prices have increased by more than $55/ton since the beginning of May while crude oil prices both on NYMEX and Brent are currently trading above $50/bbl threshold.
Accordingly, several producers in China have increased their export PET offers. Chinese players have questioned the sustainability of this firming in the export market after a three-month-softening trend as they believe it was mainly supported by costs rather than real demand. Yet, the local PET market could not remain unresponsive to firmer costs as well and have witnessed gains this week.
Following the recent gains in the Asian PET market, PET players in Europe have started to share their opinions regarding the possibility of a change in market direction for June.
An Italian converter commented, “We purchased more materials with further reductions of €20/ton when compared to early May levels. Still, we believe the rebound in PET prices in China and Southeast Asia may influence June offers in Europe. We think that producers are likely to seek rollovers or slight increases of around €5-10/ton next month.”
An Italian trader noted, “Our most recent sales price for PET bottle indicates a €20-30/ton of decrease from April levels. However, we think the market has to respond to the rebound in the Chinese market as players are waiting for new June prices with rollovers or some small increases.”
A converter in Germany opined, “We believe that producers may aim small increases for June due to firmer PET prices in China, although feedstock costs in Europe recorded limited increases.”
In Switzerland, a trader said, “For European materials, our May prices are €30-40/ton lower than April levels. We are waiting to hear for June prices in the import market after the recovery seen in the upstream markets in Asia. We think PET prices in Europe may face a change in the near term so long as the Chinese market maintains its uptrend.”
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