European PET stabilizes at around 3-year low, is bottom near?
According to ChemOrbis Price Index, the weekly average of spot PET prices stand at more than 3-year low and they are reported at around €880/ton on FD Italy and €870/ton on FD NWE basis. Data also show that the prevailing prices are down by around 23-24% from December 2018.
There has been a discrepancy among players as to whether or not prices have room for further drops. Some players think that prices may post further drops in limited amounts. Ample supplies, low season and the lack of cost support were blamed for weak expectations.
A buyer affirmed, “We are not buying extra material as the month is short. Our demand is subdued and we may even skip January purchases.”
The majority of players, meanwhile, concur that decreases might have come to a halt as December PET deals have been closed with rollovers so far.
They also think prices may not be prone to major changes in January, bearing significant PET drops during the entire year in mind. “The stable trend might be extended into next year as there are no supportive factors to push prices higher in January,” a buyer said.
Meanwhile, expectations call for a bullish start to 2020 on part of some sellers. They have already voiced their intentions to stand adamant on their current offers, claiming that their margins squeezed to an important extent amid successive price falls. Plus, they were aiming to fix supply-demand imbalance in the market via lowering operation rates at PET plants.
Sellers also maintain their hopes of seeing a recovery in demand in line with buyers’ need to replenish stocks.
“We purchased at a rollover. Prices will not fall further this year while they might increase early next year,” a buyer opined.
On a side note, contract negotiations for 2020 started, with expectations calling for decreases of €30-40 or €10-20/ton.
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