PET Prices Slump in Europe Due to Weak Demand and Lower Feedstock Costs
- 09-Nov-2022 3:00 PM
- Journalist: Peter Schmidt
Germany: Polyethylene Terephthalate (PET) bottle prices have weakened this week due to sluggish demand from the downstream packaging sectors. Traders noted that the PET prices witnessed a new round of small reductions as demand continued to wane in line with the winter season.
The broad range for PET bottle prices stands at USD 1850/MT FD Hamburg on 4th November 2022, indicating a decrease of 1% compared to last week.
The European PET bottle market remained oversupplied with material despite low production rates. Supply continues to surpass the demand emanating from unsatisfactory sales since October 2022. However, higher import volumes and underlying weakness in demand have weighed on the price of PET in the region. At the same time, Price drops were attributed to various factors, including declining freight charges and the northern hemisphere's off-season, which compelled the local suppliers to reduce their offers for November 2022.
Therefore, the waning season, the reduced downstream offtakes, and the easing freight charges from Asia to Europe have probably paved the way for a new round of declines in the European PET market. Meantime, declining feedstock PTA (Purified Terephthalic Acid) and MEG (Mono-Ethylene Glycol) prices have further reduced the pressure on production costs.
It has been observed that the PET producers, who were stuck between decreasing feedstock prices and weaker consumption, lowered run rates amidst slow offtakes from downstream packaging sectors. However, this action did not improve the general sentiment for the product, and prices are more likely to continue to decline through November.
As per ChemAnalyst Forecast, "To put it in a nutshell, energy costs and supply disruptions had a milder than expected impact on PET prices during the first week of November. Therefore, Polyethylene Terephthalate (PET) markets may follow a stable to weaker trend in the coming weeks. However, offseason for PET bottle demand may further contribute to the declining price trend."