AKRON, OHIO — Increasing feedstock costs and tight feedstock supplies have resulted in a net increase of 2 cents per pound for North American PET resin since Dec. 1.
The net increase was factored in at most accounts during December and January, sources said. An additional increase of 4 cents per pound was being attempted by North American PET makers during February. The results of that attempt are still being determined, but market watchers expected at least half of it to be successful.
Regional PET prices increased almost 10 percent during 2012, according to the Plastics News resin pricing chart.
The 2-cent December-January move — along with a total of 9 cents in increases that hit the market between September and November — surprised some buyers since they came during the fall and winter months when sales into the beverage-heavy PET market typically slow down.
Lower demand often makes it more difficult for material suppliers to raise prices. But in recent months, challenges in PET feedstock supply have trumped lower demand, sending prices up.
The recent rounds of increases also come at a time when regional PET demand is expected to grow at low single digit rates at best for the next several years. In spite of that low growth rate — and in spite of a recent estimate that the regional PET market already is oversupplied by about 2 billion pounds – M&G Group has announced plans to build a massive plant with 2.2 billion pounds of annual PET capacity in Corpus Christi, Texas.
That plant would be operational in 2015 or 2016. Some of that new capacity could be earmarked for export markets, although industry estimates are that the global PET market currently is oversupplied by almost 20 billion pounds.