PET prices

Raw material pressures have sent North American prices for PET bottle resin and solid polystyrene higher since Aug. 1.

PET prices are up an average of 3 cents per pound, largely due to higher prices of paraxylene feedstock. That, in turn, has lifted prices for purified terephthalic acid feedstock, which has its U.S. prices tied to paraxylene on a formula basis.

“Paraxylene keeps going up,” one industry insider said. “The margins on it are huge right now. And supplies [of paraxylene] are relatively tight.”

The raw material push has sent prices higher even as North American PET demand largely was flat in the first half of 2011. Demand for the material in Mexico was up slightly, but lower U.S. demand -- caused mainly by continued lightweighting of PET bottles -- negated that growth, the insider said.

Consumer preferences continue to move toward thinner water bottles and away from thicker bottles for carbonated soft drinks, he added. This was evident in a conversation he recently had with a U.S.-based bottler.