PET feedstock costs support uptrend in Europe

European MEG and PX contracts were fully settled up €150/ton and €55/ton at €915/ton and €815/ton FD NWE, respectively. The upsurge in the MEG contracts outstripped increase expectations while some players think that this is partly due to the €45/ton hikes in the ethylene settlements. Accordingly, PET sellers applied further hikes on their January prices. More offers are expected to emerge with players resuming activities as of next week when they will be back to their desks.

A seller from Switzerland applying hikes of up to €80/ton from December noted, “We think that buyers will not resist price hikes as producers are only passing feedstock increases onto their PET prices without pursuing recovery of their margins.”

A manufacturer based in Belgium reported receiving initial January offers with €50/ton hikes from last month and added, “We are planning to make more inquiries before deciding on our purchases. However, the market is expected to remain mute until next week given the holiday lull. Apart from that, we expect to see more Chinese material in the medium term following the expiration of the anti-dumping for this material.”

A distributor in Italy commented, “We have already applied limited hikes on our prices between the end of December and the beginning of January while we applied further hikes following higher MEG settlements. We assume that it will be difficult to see prices below the €1000/ton threshold in the short and medium term.”

Meanwhile, a buyer thinks that this situation might change in the medium term as prices at or above €1000/ton threshold are considered as too high. The buyer stated, “We are covered for a couple of months.”

The PET price ranges are quoted at €960-1050/ton both in Italy and Northwest Europe on local terms.