PET prices almost stable at firm levels in Asia, rise in Europe

Overall PET availability in Europe continues to be very tight, pushing spot prices higher to levels of €1200-1250/ton on FD NWE basis for May, despite absence of materials physically available in the market currently, as per Chemorbis. Some market sources claim that prices are not of prime importance as buyers want to be able to source materials at the time of current tightness in supply levels, lack of imports and approaching high season for PET applications. The overall spot market is up by €35-65/ton from the beginning of April and €75-95/ton when compared to early March. Meanwhile, the current market level is reaching the last peak in prices seen in August 2008. In feedstock news, spot PX prices recorded US$65/ton increases since the beginning of March and a US$25/ton increase since beginning of April at US$1045/ton on FOB NWE basis. In production news, La Seda has started to supply from its 170,000 tpa El Prat facility, though supplies will not be sufficient to satisfy the market’s needs, especially when considering there is an upcoming shutdown at Novapet’s 130,000 tpa PET plant in June for about 5 weeks. In China, import PET prices from South Korean producers were pegged at US$1290-1330/ton on FOB Busan basis, up by ten dollars at the low end of the range while remaining stable at the high end on week over week basis. Most major Korean producers’ offers were reported to be focusing at the top end of the range while the low end is available in exchange for firm bids. Meanwhile in the export market, offers were reported at US$1290-1320/ton FOB China, cash basis, up by US$20/ton at the low end on the week after successful conclusion of in the range of US$1270-1280/ton in the previous week for large volumes. These figures have not been reported again and the overall range therefore represented a US$20/ton increase at the low end. Stock levels across the country are low hence most producers elected to leave their offers unchanged this week. Buyers are not in a rush to buy, pronouncing buy ideas at US$1280/ton, ten dollars below the current range. However, sellers counter these buy ideas, pointing to the fact that they are operating at or near to break-even point while adding that PTA and MEG feedstock costs are not likely to see any major decreases over the near term. Considering the opposing effects of lower than normal inventory levels and buyers’ resistance towards higher prices, the PET market is likely to retain its firm levels for the rest of April unless upstream costs surge ahead of the high season. Plus, there is an arbitrage opportunity for Asian PET in Europe.