PET sellers pass on price hikes

European polyethylene terephthalate (PET) prices will rise by at least €120/tonne in October, say producers. After months of failed attempts, players say they are confident of achieving their targeted price hikes this month, with some suggesting increases as high as €150/tonne.

‘I’m glad to say that, unusually for October, and almost for the first time this year, we can pass our price increase on to its full extent,’ says one producer. ‘Customers understand there is a margin problem and accept there will be increases.’

The rising cost of PET feedstocks, purified terephthalic acid and monoethylene glycol, as well as paraxylene (PX) further upstream, have seen margins shrink considerably over the year. Players admit they have had ‘an enormous struggle’ to pass on the increases.

‘We’ve been squeezed during the summer months, but the continued pressure from raw materials means producers now have no choice but to attempt to put prices up,’ adds another source. ‘Buyers have no choice but to accept. They’ve used their inventories and have to start replenishing stocks.’

A strong aromatics complex has seen October PX contracts settle at €700/tonne, up €40/tonne on September. Spot numbers have also soared to $890-900/tonne fob NWE, up from $610-620/tonne in January. Nevertheless, observers point out that PET has increased by only around €150/tonne during the same period. September numbers are reported at €1200-1300/tonne.

‘Our downstream customers need to understand that these higher levels of raw materials are a feature we’ll have to live with for some time,’ says a source. ‘It’s not just a spike that people can work through with inventory. These price levels are likely to be a feature for most of next year, and maybe even beyond.’