Editor Caroline Murray, caroline.murray@icis.com

 NOTE: For full details on the criteria ICIS pricing uses in making these price assessments visit and click on www.icispricing.com and click on “methodology”.

Price ideas for March polyethylene terephthalate (PET) remained firm, with suppliers already talking about potential increases. Figures of plus €20-30/tonne over February levels were mentioned, though remained unconfirmed even as targets, at least from European manufacturers.

Cost pressure from upstream markets remained the justification for the increases which took place in February, and sellers’ apparent targets for March. This was particularly pertinent in February as PET producers failed to pass all the feedstock increases through in January.

Most players, however, said it was premature to talk of March pricing and discussions were yet to take place in earnest.

The February price of domestic PET rose by an average of €55/tonne to €1,050-1,090/tonne FD Europe, though up to €1,100/tonne was also heard on occasion.

Importers had lost the competitive edge so far this year, and exchange rates played a big part in this, sources said. Several customers were loathe to pay similar for material that had yet to set sail from Asia and/or the Middle East as material that was produced locally. European suppliers, therefore, had been feeling the pull on demand for local PET. 

Offers for imports due to arrive towards the end of March and the beginning of April, were on the market at €1,100/tonne FD Europe, buyers and sellers said. Most players doubted a customer’s report of having bought material €50/tonne below this, but they agreed that €1,100/tonne FD was a figure that had not yet been accepted for future deliveries.

With preparations for the traditional high season potentially taking place next month, some industry sources were confident that prices would indeed remain strong. Others, however, speculated on earlier import purchases dampening demand. The picture of demand was somewhat blurred by reports of relatively high stocks in some cases and low stocks in others where customers were already seeking material for April.

UK prices were closing in on £1,000/tonne FD, though earlier reports had levels of £940-950/tonne FD still firmly in place. Exchange rates were playing a part in the increases, particularly for those buying dollar-based material.

In Russia bottle-grade spot rouble prices were assessed marginally up this week at Rb 51,000-52,000/tonne (€1,257-1,282/tonne) EXW, as one domestic producer was offering at some Rb 53,000-53,500/tonne (€1,307-1,319/tonne) in March. Russian domestic numbers included 18% VAT.

This week’s news that the European Commission (EC) has initiated a preliminary review on PET bottle-grade chips imports from KP Chemical on possible dumping activities caused ripples of concern through the European customer base.

Some were surprised that the anti-dumping investigations were towards a specific player as opposed to a country. Particularly, one player said, as KP Chemical Corporation’s subsidiary Lotte Chemical UK recently took over Artenius’ PET and feedstock purified terephthalic acid (PTA) assets in Wilton.

Customers were already rallying against another anti-dumping campaign which had been initiated in 2009 by the PET Committee of Plastics Europe against imports from Iran, United Arab Emirates and Pakistan on behalf of producers representing over 50% of production in the EU.

Upstream, there was also an initiation of an anti-subsidy proceeding concerning imports of PTA originating from Thailand.

Upstream, March monoethylene glycol (MEG) contracts were confirmed at €899/tonne FD Europe, up €59/tonne from February. Derivative markets greeted the timely settlement positively, having suffered from late agreements through much of 2009 and early 2010. The €59/tonne hike would convert to a cost of €21/tonne into the PET market, sources agreed.

Initial reports had purified terephthalic acid (PTA) rolling over in February, as per its feedstock, paraxylene (PX). All eyes were now on March PX movements.

Spot activity in the European paraxylene (PX) market was lacklustre this week ahead of the March contract settlement. PX prices in Asia were yet to rebound following the Lunar New Year holiday, which kept the arbitrage window between the two regions closed. There was no clear indication as of yet regarding where the March contract price would settle. Following the rollover at €800/tonne FD NWE in February and a swift Asian settlement at $1,020/tonne CFR Asia, some consumers were hopeful for a slight reduction.

In production, one of Equipolymers’ German PET facilities with a capacity of 170,000 tonnes/year, was down for a month of maintenance until 15 March.

The next shutdown in Europe was Indorama’s PET and upstream PTA plants in Rotterdam, the Netherlands, which were due to go down in early to mid-June for up to two weeks of planned maintenance.

Lotte Chemical UK’s Wilton site was due to restart in April, according to sources. Artenius’ El Prat de Llobregat, Spain, was heard to be on schedule to restart in March.

($1= €0.74)
(€1=Rb40.56)
(€1=£0.89)

This week on ICIS news: ( www.icis.com):
26/02/2010 08:58 Asia March PX ACP settles $35/tonne lower

26-Feb-10 08:36 China’s Xiang Lu to start up PX, PTA plants by 0ctober 2011

25-Feb-10 20:22 March to be pivotal month for US PET as sellers seek margins

25-Feb-10 18:54 European MEG March contract price receives positive feedback

25-Feb-10 14:28 Europe PET customers rally against anti-dumping campaigns

ICIS pricing has launched the new Polyethylene pipe grade (Europe) price report offering price assessments featuring the FD NWE quote. Request a free sample report at sales.uk@icis.com or call +44 (0)20 8652 3335