Chaos prevailed again on the European PET market in September and spot prices frequently underwent triple-digit increases. In contrast, the spectrum of price movements with contract and regular business was very broad, extending from a rollover to triple-digit hikes. The moderate rise in costs played only a minor role.
At the beginning of September, the hurricane in the US left a considerable amount of instability in its wake. Furthermore, the production stoppages in Belgium and – at least in the first half of the month – the UK deprived the market of a significant amount of material. Although imports are available, they are not particularly attractive price-wise. After the very high spot prices of the last few months, many buyers are on the lookout for reliable contract supplies. In this respect, the picture has turned around completely during the course of 2017.
Many players say the situation should have calmed down in October, and expect the declining seasonal demand for bottles to also lead to an easing of demand. At the same time, there are indications from the UK that the force majeure at a production line in Wilton (Lotte Chemical) could soon be lifted.
In the US, an important producer, M&G Polymers, seems to be about to go under, and production has been halted in a situation comparable to that at the Geel site in Belgium due to liquidity problems. In view of the flood of material still arriving from Asia, bottlenecks are unlikely. Nevertheless, the era of excessive supplies of PET seems to be coming to an end, with two key top-ten producers in financial difficulties.