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Sept PET expectations diverge in shade of opposite factors in Europe

by Merve Madakbaşı -
  • 30/08/2021 (03:07)
Polymer players in Europe have started to return to their desks following a long summer break. August PET bottle deals were concluded with rollovers to €20-30/ton ($24-35/ton with recent parity) gains both in Italy and Northwest Europe, bolstered by costs. Yet, expectations for September offered a mixed bag.

PET Bottle Prices – FD NWE – FD Italy

Buying interest lagged behind expectations in August

Most players concurred that activity was stalled in the spot market as summer holidays mitigated the impact of limited import volumes. “Buyers preferred to meet their needs from the contract market as they found spot offers uncompetitive,” said multiple sources.

PET bottle consumption lagged behind expectations despite the high tourism season mainly due to the impact of the highly contagious Delta variant across the world. Some players opined, “Buyers’ softer expectations may have caused them to operate with low stocks instead of searching for fresh cargos.”

A packager in Italy confirmed, “We preferred to consume our import materials on hand, which we had secured in June. We think prices may stabilize in September or even ease down. The market may face some drops in October, if not in September.”

Logistic snarls curbed imports from Asia

Inflated freights coupled with severe container issues kept the European market from Asian cargos, with Chinese and South Korean origins being mostly absent over the course of August.

The virus-induced port closures in China back in summer as well as pre-Christmas orders, which were placed earlier than usual this year, added to the prolonged logistic issues across the world. This led to additional hikes in shipping costs and reduced space in vessels on a global scale.

Players are at odds about September outlook

Suppliers believe that the market may retain its strength next month so long as import availability remains low amid transportation mishaps.

However, PET consumers believe that the market may stabilize, if not falling, saying, “The prevailing spot levels are found unworkably high by converters, considering a lack of vivid end product demand. We may see slight drops next month. Still, we need to wait for the outcome of the August MEG settlement to have a better clue for the upcoming trajectory.”

Last week, spot PET bottle offers were assessed flat at €1100-1180/ton FD Italy/Northwest Europe, 60 days deferred payment when compared to the pre-holiday week.

In the upstream chain, August PX contract has settled slightly higher on the month. Spot MEG prices on an FD NWE basis were $25/ton softer to be reported around $970/ton (€825/ton with recent parity) when compared to the end of July, while the contract settlement was pending at the time of press.
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