European polyethylene terephthalate prices surged this week on supply concerns amid a force majeure at Lotte Chemicals' plant at Wilton, northeast England, and reports of disruption to supplies from JBF's plant in Geel, Belgium, market sources said.
Northwest European virgin PET prices rose by Eur100/mt (about $117/mt) on the week to Eur1,125/mt FD NWE, a five-month high, while the UK virgin PET price soared GBP155/mt (about $201/mt) from last week's assessment to GBP1,060/mt FD UK, on extremely tight availability, according to market participants -- they have "hit the panic button," one source said.
FORCE MAJEURE FROM WILTON
PET producer Lotte Chemicals declared force majeure on supplies from its Wilton facility last week, a company source confirmed Wednesday.
The unit affected is the older of two plants on site, with a nameplate capacity of 160,000 mt/year. "It was shut down on Friday [August 4]," the source told S&P Global Platts.
It is not currently known when the plant will restart. The company was not immediately available for official comment.
QUESTION MARK OVER GEEL
Concerns over supply from the 390,000 mt/year Geel PET plant were also heard in the market. The plant is operated by Indian-headquartered petrochemicals producer JBF.
On Thursday, JBF took the step of sending a strongly worded letter to the Bombay Stock Exchange, which was seen by Platts, on "malicious/inaccurate news articles."
"[T]here have been several press articles/social media with regard to the debt obligations of the company which have fueled further vindictive and inaccurate rumors about the company," the letter said.
The company cited an item from PCI Wood Mackenzie "misleading its subscribers by mentioning about the bankruptcy or the operations of the company."
According to JBF's letter, Wood Mackenzie sent the company an "apology email" saying: "Some of the information in our email flash earlier today regarding JBF Group is inaccurate."
"Specifically, the statement about bankruptcy was totally incorrect... Furthermore the PET resin plants in Belgium and India continue to operate," it added.
JBF's letter went on to say that, although the company was facing certain cash flow issues it was working with lenders towards resolving them, and: "Despite rumors of the company's operations being impacted, all plants are running satisfactorily."
JBF did not immediately respond to a request for comment from Platts. Wood Mackenzie declined to comment.
Concerns about supplies from JBF remain in the market, according to a buyer late Thursday.
"The plant was running three days ago, now it seems a different situation -- they are reducing supplies, only supplying contracts, and pushing for reduction in volumes," said the buyer who has sourced PET from JBF.
