Will European sellers succeed in shifting PET market up in July?
Sellers are expected to approach the market with hike attempts in July given improving demand amidst the high season for PET applications in Europe coupled with limited supplies across the region. Yet, the pressure stemming from energy markets and consequently upstream markets remains in place as a bearish factor which may restrain possible increases.
WTI crude on NYMEX and Brent futures on ICE have been trading below the $50/bbl threshold since end-May and early June, respectively. Crude’s performance in the first half of this year has been the weakest since 1997, according to Reuters.
In Italy, a disposable kitchenware manufacturer commented, “Although we made purchases in June with €10/ton decreases, we think producers will try to seek increases for July due to limited supply and strong demand.”
A buyer stated, “We find current the price levels too high considering the recent weakness of feedstock prices and crude oil. However, we think prices may witness some gains in the near term based on supply issues we heard about.”
A buyer in Belgium noted that obtaining decreases were not difficult in June and said, “We heard about supply issues which may push producers to attempt for hikes in July.”
A PET bottle manufacturer in Germany, who closed its June contract prices with a €20/ton decrease, claimed that producers will not concede to discounts in July as demand is good given the high season.
There are also others who think that the slump in costs may counterbalance the supply limitations like a distributor in Switzerland who opined, “Our offers are stable when compared to the beginning of the month. The market is balanced between supply limitations and good demand along with bearish upstream and crude oil prices. For this reason, we think the uncertainty will be retained in July.”
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