Is European PET market on brink of a firmer trend after 2 months?

Initial November offers have started to emerge with rollovers in the regional PET markets, while sellers are now signaling slight price hikes after two consecutive months of declines. The question remains whether these efforts will lead to a shift in market direction and lift prices from year-to-date lows.

Sellers renew confidence amid higher PX settlement and freight rates

Imports have lost competitiveness amid heightened volatility in the crude oil markets and recent hikes in container freight rates, let alone ongoing uncertainties surrounding delivery times. The narrowing price gap between the import and local markets has already prompted some sellers to capitalize on the shifting dynamics.

Moreover, October PX contracts settled with an increase of €40/ton from September. Following suit, October PTA contracts also saw an increase of €7/ton amid higher upstream costs. These factors helped sellers renew confidence after prices hit year-to-date lows at €1075-1080/ton FD Italy/NWE on a weekly average, ChemOrbis Price Index showed.



No major supply concerns despite Alpek’s FM

According to market sources, Alpek Polyester has declared a force majeure on its 220,000 tons/year PET bottle chips plant in Wilton, UK. However, this announcement has had little impact on the market as overall availability has been sufficient to cover current demand.

Indeed, comfortable availability led to a price competition among sellers over the past few months. The union has been well supplied with imports, which alleviated any shortfalls from regional suppliers particularly amid cuts in production rates. Yet, market participants remain vigilant, closely monitoring developments in the import market. Rising freight rates and a waning demand for non-European materials may eventually curb the influx of imports, potentially paving the way for elusive import supply.

Low season remains intact, eyes on potential substitution activity

The fading seasonality has been one of the main culprits behind the ongoing price cuts for virgin PET. October was a weak month in terms of purchasing activity in line with the seasonal patterns. Buyers continued to report poor order entries, feeling little incentive to build up stocks amid low bottle season.

As the price gap between virgin and R-PET prices widened amid falling spot offers for the former, some players in the flakes market were speculating on a potential shift toward substitution in the near term. This consideration is further underpinned by expectations that demand for virgin PET may decrease in Q4 as the SUP directive –mandating 25% recycled content in beverage bottles starting from January 2025– comes into effect.

Although all EU countries must include 25% recycled content in PET beverage bottles from this date on, the lack of detailed information regarding its implementation and potential penalties has introduced a degree of uncertainty, leaving the market in a state of cautious anticipation.

Approaching year-end lull dents sentiment

Buyers tend to build up less stocks ahead of the Christmas period in Europe. Hence, they do not find sellers’ small hike intentions feasible, expecting to pay rollovers on November deals. Confirming slowing exports to the EU, a supplier in nearby Türkiye said, “There has been a strong competition amid aggressive Vietnamese offers in the region. As the year draws to a close, deliveries will be even slower.”