Raw material pressure sent North American PET bottle resin prices up by an average of 3 cents per pound in July.
That increase comes after prices for the material increased by an average of 2 cents per pound in June. Those combined 5 cents worth of increases now have the North American PET market right back where it started price-wise in January. Prices had been flat in May after sliding a total of 5 cents in the first four months of 2014.
Market sources said that PET feedstock markets remained constrained in July after tightening in June. That tightness had helped the June increase take hold after it initially looked to be unsuccessful, they said.
Regional PET demand remains flat to slightly down so far in 2014, as a result of reduced consumption of carbonated soft drinks and of thinner water bottles requiring less resin per bottle. As a result, market watchers are skeptical of the need for the large amounts of new PET capacity that are set to hit the North American marketplace in 2015 and beyond. Unless domestic PET demand increases at a substantial rate, much of that material would have to be exported in order to avoid a flooding of the North American PET sector.
Now with 10 cents of price volatility through six months, the North American PET sector is on track to surpass its 2013 total of 12 cents of volatility. That total was the lowest posted by the market since 2007. From 2008-12, PET price volatility in the region had averaged almost 35 cents per year.