Indorama Ventures on Friday became the second producer to announce a September price hike on US PET resin, lifting prices by 5 cents/lb effective September 1.
In a letter to its customers, the company said the increase was necessary due to a continued increase in raw material costs. The increase is applicable to Indorama's subsidiaries, Starpet Inc. and Auriga Polymers, the letter said.
Earlier Friday, DAK Americas announced that it would raise US September polyethylene terephthalate prices by 4 cents/lb. DAK also pointed to higher raw material costs as well as the need to partially recover margins.
The announcements follow increases in the feedstock purified terephthalic acid and monoethylene glycol markets. US PTA costs rose by more than 4 cents/lb on the back of a 6.15 cents/lb increase in the upstream August paraxylene contract, which settled at 69 cents/lb. MEG contracts also rose in August, jumping 2 cents/lb to 45.25-45.75 cents/lb. MEG producers announced this week that they will seek further increases of 4-5 cents/lb in September.
Sources said that PET demand was decent, supported by the antifreeze canning season, but noted that demand would likely erode.
"The demand outlook is not good," said one source. Spot trade was thin this week and prices were last talked near 71.50-72.50 cents/lb DDP US West Coast, though no confirmed deals were reported.
