PET prices

Singapore (Platts)--29Sep2011/157 am EDT/557 GMT

Asian polyethylene terephthalate buyers have slashed purchase volumes despite cooling PET prices in the region after a recent surge, as they expect prices to fall further, producers told Platts this week.

PET prices started trending lower in the past two weeks on lower feedstock costs, with PET on an FOB Northeast Asia basis assessed at $1,670/mt Wednesday, down $45/mt week on week, while FOB SEA prices were assessed at $1,690/mt, down $50/mt over the same period.


Based on the latest feedstock prices, the breakeven price for PET is estimated at $1,613.24/mt, down $110.56/mt from last week. On Wednesday, CFR China monoethylene glycol was assessed at $1,212/mt, down $108/mt week on week, while CFR China purified terephthalic acid was assessed at $1,238/mt, down $52/mt over the same period.

The dip in the past weeks comes after five consecutive weeks of increasing prices.

On August 10, FOB NEA and SEA PET was assessed at $1,650/mt. The lower price in the typically weak year-end demand season has resulted in optimism on part of the buyers.

"People are taking a wait-and-see approach, and buying [limited volumes to meet immediate requirements]," said a producer in South Asia.

Currently, buyers are making inquiries for around 500 mt-1,000 mt cargoes, while earlier they would buy up to 30,000 mt at one go.

A South Korean producer said his customers were breaking down their demand into about four batches. "They believe prices will fall [in the near future], and don't want to take a risk," said the source.