October PET deals concluded with moderate increases in Europe
Deals see partial cost pass-through
PET markets in the region managed to absorb smaller increases as compared to the initial targets. A distributor based in Switzerland achieved increases of €10-20/ton for local material while another distributor based in Germany attained increases of €10-30/ton for local cargoes. A distributor in Italy also managed to pass on hikes of €20/ton increases in October deals.
MEG constraints shape October pricing
Feedstock supply concerns were one of the key factors that influenced PET pricing this month. European MEG spot prices hit a high of €830/ton FD NWE by late September, supported by a reduction in supplies from the US amid hurricane-impacted plant operations and logistical constraints. October MEG contracts were also agreed with an increase of €65/ton ($76/ton) from September. Although the arrival of some delayed cargoes has pulled spot pricing down during the last couple of weeks, MEG prices are still elevated due to the gradual hurricane recovery in the US.
Demand limited by pandemic
Across the regional markets, buyers were seen limiting their purchases to immediate requirements as the peak demand period for PET came to an end. This followed an unusually weak peak season for PET bottle, which was hampered by the cancelation of mass events and reduced travelling amid the pandemic.
Will markets sustain increases over long-term?
More deals are expected to be concluded with similarly moderate increases in the days ahead. However, players report that there are some key variables pressuring the long-term outlook. Besides the start of low season and easing feedstock supplies, the upcoming plastic tax in January remains a source of uncertainty for European players.
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