The recently imposed duties on PET (Polyethylene Terephthalate) by the European Union, is not likely to have any sizeable impact on Lotte Pakistan’s PTA sales, according The Express Tribune. Over 30% of Purified Terephtalic Acid (PTA) production is sold to the PET sector, while the rest goes to PSF and others. Any drop in demand from the PET sector is expected to be soaked by the PSF segment which remains well in demand as Pakistan is a net importer of almost 100,000 tpa.
The European Union (EU) imposed countervailing duties of €44/ton on PET imports from Pakistan, in addition to imposing the same on Iran and UAE. The three together account for about 39% of total PET imports into the EU. Novatex is the sole producer of PET resins in Pakistan, and has a capacity to produce 235,000 tons of PET, currently operating at an estimated 90% run rate. About 80% of its production is exported, of which 40% goes to EU and the balance id exported to USA and Middle East. 20% is sold locally, even as the country still imports about 80,000 tpa of PET suggesting further room for penetration in the domestic market. Imposition of duties would make Pakistani PET expensive in the EU market and therefore, Novatex may see a decline in its sales going forward.