Subscriber note: ICIS pricing intends making a one-time non-market adjustment to the Polyethylene Terephthalate (Europe) price assessments for monthly REF prices in January 2012. The adjustment would lower the price ranges to more closely reflect actual levels. THE ADJUSTMENT SHOULD NOT BE INTERPRETED AS A MARKET PRICE CHANGE. Please contact Caroline Murray (caroline.murray@icis.com) with any queries.
The REF prices are now under the title of CONTRACT because they move monthly and this brings the format of the report in line with our other ICIS reports. The weekly domestic prices remain under the title of DOMESTIC.
July reference (REF) contract prices
The polyethylene terephthalate (PET) REF prices for July decreased by a weighted average of €40/tonne from the third week in June to the third week in July, hence the adjustment to the monthly delta above.
DELTA FROM JUNE TO JULY - MINUS €20/tonne TO MINUS €50/tonne
July domestic freely-negotiated and spot FD Europe prices
After three months where prices decreased because of competitive imports and weakening feedstocks, buyers and sellers are now speculating on prices having bottomed out. Justification for this includes fewer imports and increasing production costs.
Imports are now scarce, some say, because European producers pulled prices down to rid themselves of the competition, but also because of unfavourable exchange rates. However, there remain aggressive sub €1,200/tonne FD Europe offers of Russian material, some players said.
The very low €1,200s/tonne FD Europe for domestic material are no longer mentioned, apart from occasionally when even below €1,200/tonne is mooted but unconfirmed. The published range has been adjusted to incorporate the majority of commentary.
Poor weather conditions across much of Europe have stifled demand, buyers and sellers agree, although some sellers still say overall sales are good and operating rates are high. Their contractual suppliers say offtake remains healthy.
August domestic freely-negotiated and spot FD Europe prices
Raw materials are firm and in the case of paraxylene (PX) look like they are strengthening in value. An estimated rise of anywhere from €60-100/tonne on PX plus a possible increase on monoethylene glycol (MEG) could result in PET production costs going up by about €50/tonne in August. These are only estimates and some players anticipate MEG will decrease or rollover, but still sources speak of PET prices having bottomed out. Rollovers or increases of €20-50/tonne are the likely scenarios for August PET, depending on source.
However, a producer announced on Thursday it would be targeting €100/tonne up on current levels which he said were at €1,300/tonne FD Europe. By Friday, a second producer reported its intention to increase by €40/tonne. Anything lower would be disastrous, he added.
Middle East
Middle East producers are offering product at $1,610-1,680/tonne FOB GCC. Buyers in the Middle East are finding local product more attractive than any imports, although they are reticent to pay as much as the higher-end offers.
Russia
Russia's bottle-grade PET spot rouble prices are steady this week at Rb61,000-63,000/tonne EXW, including 18% VAT.
Despite the ongoing upturn in seasonal demand, spot numbers are seen as soft amid increasing imports.
From January 2011 to June 2011, Russia's total imports of PET amounted to some 160,000 tonnes or about 31% up year on year, according to the Russian customs statistics. In June, PET imports from China reached 19,000 tonnes or 16% up month on month, while imports from South Korea amounted to 12,000 tonnes or 15% up.
In an apparent bid to substitute imports this week, Russia's state-run investment fund decided to disburse Rb1.5bn (€38m) to finance construction of a new 486,000 tonnes/year PET plant. The building of this plant in Russia's southern Kabardino-Balkariya region would cost a total of Rb12bn (€304m).
Production
Control PET SGPS should be testing operations at its newly-acquired 70,000 tonne/year Portugal-based PET plant and is already making offers to the market, a source close to the company said. Control PET SGPS is a subsidiary of Portugal’s Imatosgil Group.
Spain’s Novapet will shut down its 250,000 tonne/year Huesca plant for about a month from 22 September. Novapet is part of the SAMCA Group, whose activities are centred around energy, plastics, textile, construction, mining and agricultural sectors.
Artlant PTA’s 700,000 tonne/year purified terephthalic acid (PTA) plant in Sines, Portugal, has entered its commissioning phase. Production is expected to begin during the fourth quarter of 2011.
Artlant, which changed its name from Artenius Sines in February 2011, said its key market is Europe, but added that its target regions also include Africa, the Middle East, India and Brazil.
As part of its restructuring, La Seda de Barcelona (LSB) sold 59% of its stake in Artlant to three Portuguese investment funds in September last year.
Lotte Chemical UK will have a shutdown on upstream PTA from 1 September. The overhaul will take a maximum of ten days and the full restart is expected around 18, 19, 20 September. The plant in northeast England has a PTA capacity of 500,000 tonnes/year. Lotte Chemical UK manufactures and sells polyester intermediate PTA and PET resin for use in the packaging industry.
Upstream
European June PTA prices moved down to €928–950/tonne FD NWE, a €26–27/tonne fall from May, in line with feedstock developments. The €85/tonne fall in July paraxylene (PX) prices could result in a further €40/tonne decrease for July PTA, but this remains to be seen. PTA players are expecting PX prices to increase by €60–100/tonne in August.
Suppliers of MEG, PET’s secondary feedstock, are targeting increases for August contracts because they see the market tightening. Bulk spot prices are moving up and have reached €935/tonne CIF NWE T2.
($1 = €0.70)
(€1 = £0.88)
(€1 = Rb39.48)
This week in ICIS ( www.icis.com):
28/07/2011 18:50 Europe PET prices may increase for first time in three months
28/07/2011 12:27 Artlant begins testing 700,000 tonne/year PTA plant in Portugal
28/07/2011 05:55 Asian PET producers hike August offers on higher feedstock costs
27/07/2011 19:01 Suppliers prepare Europe MEG market for an August increase
27/07/2011 18:17 Europe August ethylene fully confirmed at €1,120/tonne
