Firming trend persists in European PET market
Early this month, a seller commented, “We have sold out our August quotas at a rollover over July. Bottle manufacturers in Italy are postponing their holidays as demand remains strong due to the better weather.”
Market players reported that demand in Northwest Europe is not as spectacular as it is in Italy and Spain. A buyer from Belgium confirmed, “The market in Northwest Europe is calmer with respect to Southern Europe.”
Not only sturdy end demand but also limited supplies continued to support the firming trend in the PET market. Players speculated about the absence of JBF in Belgium, although no official news was reported about the plant’s status at the time of publication.
On top of this, Lotte Chemicals declared force majeure on PET supplies from one of its two plants at Wilton facility in the UK, according to regional players.
A buyer noted, “We received offers in the contract market mostly with rollovers while spot offers indicate rollovers to €10/ton increases. Spot availability is tight and we are concerned that it might shrink further in line with the recent shutdowns.”
A seller from Switzerland shared similar comments, saying, “Supply limitations are evident in the market. Even though there are not widespread shutdowns, producers have been running their plants based on the orders they take for the past couple of months. Along with the recent shutdowns, demand has exceeded supply. We think that PET prices will remain under upward pressure in September-October. However, we have to keep an eye on import offers as they started to surface at competitive levels thanks to the stronger euro-dollar parity.”
Expectations for September also remain firm. A PET bottle manufacturer in Italy reported to have purchased import material with September-October delivery as European producers have already sold out their August allocations. He also said, “We do not find European origins favorable in terms of pricing. Demand from the manufacturers of the mineral water sector remains strong thanks to hot weather conditions. We will produce at full rates for August, but demand in September will mainly depend on the weather.”
A distributor reported, “We received several inquiries from new customers, who are in search of extra material. Prices will remain firm in September.”
Feedstock prices are also moving north on healthy downstream demand. If crude oil prices and feedstock costs continue to rise, PET prices will not see any drop in September, especially if weather conditions continue to support end manufacturers.
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