Shrinking Downstream Demand Hampers the European PET Prices

Germany: Polyethylene Terephthalate (PET) prices fell in Germany throughout November 2022. Demand has decreased as a result of the economic slump and recession fears. Additionally, with the recent decline in crude oil prices, many upstream industries that process PET were compelled to restrict or lower their production rates.

ChemAnalyst data shows the stability in PET prices during the first week of December 2022, which has now been continuously declining during the week ending 9th December 2022, with a price decrement of 2.12% in the German market.

The downstream Beverage and water bottle sectors' demand for PET declined as their sales fell because of worries over a possibly approaching recession. Natural gas abundance has also helped stabilize the PET market and drive down prices because European gas reserves have been filled to more than 90% capacity. A balanced natural gas market has assisted Europe in avoiding a disastrous energy crisis, which has led to the perception that prices are falling for several goods.

The factors mentioned above support the declining price trend for PET. Still, the ongoing winter season is also the primary cause of price decline as the demand for PET bottles from the beverage and water bottling sectors has declined.

Additionally, as port congestions are reduced, and there are fewer yard occupancies, supply chains are operating effectively, ensuring regular material flow in the market. As a result, the current inventories can readily meet any demand from the downstream industries. Production costs have also been reduced, supported by lowering feedstock Purified Terephthalic Acid (PTA) prices in the German market.

Analyst of ChemAnalyst predicts a further decline in PET prices, as demand from the downstream sector is not expected to grow in 2022. The analysis also suggests of partial increment in offtakes during the start of 2023.