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Will European PET respond to softer China and feeds?

by ChemOrbis Editorial Team -
  • 15/03/2018 (04:11)
In Europe, PET sellers approached the market with increases of €30/ton for March, citing ongoing production outages across the region, yet buyers could obtain rollovers to smaller hikes of €10-20/ton on deals. Despite limited supplies, demand has slightly cooled off as buyers built some stocks in the previous months and MEG contracts settled €12/ton down for March.

A buyer from Germany confirmed that the sentiment has changed in the last few days due to softening feedstock costs.

Players are now observing how European PET markets will respond to lower feedstock costs and the recent downturn in Asian markets in the midst of the approaching high season and limited supplies. Some PET producers in Asia have pioneered price falls this week after around five months of firming given the plunge in spot MEG prices during March.

Expectations to see a seasonal pick-up in demand prevail among European players. The cold spell that has been in place for a while in Europe delayed the start of the high season. If demand improves in line with the expectations, this might mitigate the impact of the cost pressure in conjunction with reduced output, many players argue.

A Northwest European distributor opined, “We think that some shutdowns in the region will continue to support the PET market. Plus, demand may improve before the Easter holidays, the first important date of the high season.”

However, some players noted that buyers were able to secure their needs without any major problems despite limited availability in Europe. They also drew attention to the fact that supplies should improve in April, which may lead to some softening in price levels as was the case in the same period of last year. Players concur that demand will set the tone of the market trend if feedstock costs continue to move south.

“We are limiting our purchases as we have sufficient stocks for now. We may consider making fresh purchases if attractive import offers emerge from Asia in the coming days.” opined a buyer from Belgium.

Meanwhile, weekly average prices on ChemOrbis Price Index suggest that Northwest Europe’s local PET market has been hovering around a more than three-year high for the past seven weeks.
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