Freely negotiated polyethylene terephthalate contract prices for June are seeing three digit decreases compared with May, according to two converters who reported settling their contracts this week.
One converter reported settling his June PET contracts at a net price of Eur1,330/mt, down Eur100/mt from May. He said although the price was good, he said maybe if he had waited a bit longer, he could have gotten an even better price.
"On the spot market I see lower prices," the consumer pointed out.
With European producers operating at good rates this month as availability of feedstock purified terephthalic acid greatly improved in May, there were no problems securing the volumes needed, the producer said.
A second converter said Tuesday morning that he was in no rush to settle his PET contracts because he expected also he could get lower prices if he held out.
However, late Tuesday afternoon, the same converter called back to report he had settled his first June PET contract at a net price of Eur1,335/mt, also down Eur100/mt from May. He said with his other contracts, he could possibly settle Eur10-20/mt lower, but that is about the level where he saw the market.
"The key thing is moving with the market, just making sure we move with the market," the converter said.
Earlier in the month PET producers had given much more modest targets for the decline they expected. One producer said he was hoping the decrease would be in line with the decrease of raw materials at Eur30/mt, while others said the decline would be more than the raw materials, closer to a decline of Eur70-80/mt from May.
Both converters reported that downstream PET demand was holding up reasonably well in Europe and is comparable to demand at the same time last year.
PET contracts normally settle toward the end of the month and are applied retroactively for product used during that month.
