European PET market extends correction phase into June after spring rally

The reversal of the trend that began to emerge during the second half of May has become increasingly evident across Europe’s PET market in early June. After reaching around four-year highs during the extraordinary rally seen in March and April, PET prices have continued to edge lower, although the pace of declines has remained relatively moderate so far.

The month opened on a slow note, with market participants reporting limited buying activity and a rapid fading of initial rollover attempts. While some suppliers initially hoped to maintain May levels, these ambitions quickly disappeared as buyers showed little urgency to replenish inventories and continued to push for reductions.

As a result, bottle-grade PET prices have moved lower across the region, although the size of the decreases has varied considerably depending on buyers’ starting price levels and individual negotiations. Market sources reported that the low end of the range has already reached around €1440/ton FD for local material, while the high end was still assessed at €1550-1560/ton FD.

Suppliers attempt to contain downward pressure

Despite the softer market tone, suppliers have been reluctant to grant substantial discounts. Upstream costs have not experienced significant decreases in recent weeks, prompting producers to attempt to place a floor under the market.

Nevertheless, buyers currently hold a stronger negotiating position than during the spring rally. Most converters report being adequately covered for their near-term requirements and see little reason to build additional stocks amid expectations that prices may continue to soften during the remainder of June.

The absence of restocking urgency has become one of the key factors weighing on market sentiment, particularly after the panic-driven purchasing activity seen earlier this year largely disappeared.

High season demand has yet to see momentum

The start of the traditional summer consumption season has so far failed to generate the stronger demand momentum many producers had anticipated.

Market participants generally agree that demand is present, but not particularly robust. Beverage consumption remains seasonally supported and weather conditions have recently become increasingly favorable, especially across Southern Europe where high temperatures have boosted consumption patterns.

However, this support has not yet translated into stronger purchasing activity along the supply chain as converters continue to adopt a cautious approach to inventory management.

Several players noted that the market currently appears balanced between seasonal end-use demand and restrained buying behavior, preventing either a sharp rebound or a steep correction from developing.

Import offers remain available but attract limited interest

Meanwhile, import offers continue to emerge in the European market, primarily from Asia.

Vietnamese bottle-grade PET was recently reported at around €1300-1350/ton CIF Europe, providing a visible discount compared to local material. Despite this apparent price advantage, buying interest for imported cargoes remains relatively limited.

Many buyers continue to favor regional sourcing amid declining local prices, expectations of further reductions in the near term, and lingering uncertainty regarding shipment reliability and delivery schedules. Rising freight rates have also reduced some of the attractiveness of imported material compared to earlier expectations.

As a result, imports currently serve more as a pricing reference and negotiating tool rather than a significant alternative supply source for most European buyers.

Trade developments involving Vietnam remain closely monitored

At the same time, attention remains focused on the evolving landscape surrounding Vietnamese PET imports.

Industry participants continue to monitor discussions regarding possible trade-defense measures targeting certain import origins. While no official announcements have been made, several market sources indicated that additional information could emerge after June 15.

The situation continues to generate uncertainty among both buyers and sellers, particularly given the important role that Vietnamese material has played in restoring import availability and improving supply options in recent months.

The possibility of new trade-related initiatives remains an important variable that could influence market dynamics during the second half of the year, players concur.

Outlook: Further declines possible, but major collapse not expected

Looking ahead, most market participants expect PET prices to face additional downward pressure during the remainder of June.

However, most players do not project dramatic corrections. Suppliers continue to point to relatively stable production costs and argue that the current level of reductions already reflects much of the recent weakening in sentiment.

The evolution of demand is widely seen as the key factor that will determine the market direction in the coming weeks. Should seasonal consumption improve more noticeably, the market could find support at current levels. On the contrary, continued cautious buying behavior may allow prices to edge lower.

Opinions regarding July remain divided. Some market participants believe that decreases could extend further into next month if demand fails to strengthen and imports remain available. Others warn that ongoing volatility in crude oil markets and the still-fragile geopolitical situation in the Middle East could quickly alter the cost picture and limit downside potential.

For now, Europe’s PET market appears to be transitioning toward a more balanced environment after the extraordinary rally witnessed during March and April, which pushed prices to four-year highs before the market entered a correction phase in the second half of May. The bullish momentum that dominated the market since early March has clearly faded, but the absence of severe oversupply and the persistence of cost-related uncertainties suggest that any further declines are likely to remain measured rather than dramatic.