European PET Resin Market Grapples With Weak Demand and Production Shifts

The European Polyethylene Terephthalate (PET) Resin market experienced limited activity during the last week of November 2023, with agreements predominantly relying on rollovers or minor declines. Unfavorable weather conditions in the US, Europe, and Turkey impacted beverage demand in November, compounded by mounting pressure on consumer spending. The reduction in PET Resin can also be justified due to decreased feedstock costs.

In line with this, there is an anticipation that Lithuania's Neo Group, one of Europe's largest PET Resin producers, has been planning to resume PET production on line No. 3 in Klaipeda in early February after maintenance. This facility, with a capacity of 160 thousand tons of PET Resin, was closed for repairs in September 2022 for commercial reasons.

In the European market, PET Resin prices remained relatively stable compared to the previous week, attributed to minor fluctuations in raw material Paraxylene and Purified Terephthalic Acid (PTA) costs and persistently low demand. The subdued demand prevented any upward adjustments in prices for November sales. Sellers faced challenges as weaker demand prevailed, influenced by factors such as unfavorable weather during the off-season for PET Resin. Producers opted to operate their facilities at reduced prices amidst the weakened demand for PET Resin.

Simultaneously, producers reported substantial inventories of finished goods that were difficult to sell due to the lack of demand. Given the prevailing market conditions, JBF Global plans to close its No. 2 PET line in Geel, Belgium, by the end of November due to the volatile market environment, as conveyed in a letter to clients.

Line No. 2, equipped with an annual capacity of 216 thousand tons of PET Resin, is scheduled for shutdown from the end of November to January due to a slowdown due to diminished demand, specifically for recycled PET (R-PET). There is a possibility of resuming operations in January, as there may be financial restructuring by the end of 2023.

Earlier, it was indicated that JBF Global had declared a temporary shutdown of its No. 1 PET Resin plant in Laakdal, Belgium, citing volatile market conditions fueled by substantial imports into Europe from Asia. The company intends to halt operations for an undetermined duration until there are signs of recovery in the industry.

In conclusion, the market price for PET Resin might continue to showcase a stable to declining trend, considering the weak demand in the beverages market in the off-season. However, the reopening of a PET Resin plant in Europe raises the possibility of an improvement in regional supply dynamics.