* PET Sep contracts down Eur47/mt, based on MEG CP fall
* MEG Sep CP settles at Eur851/mt FD NWE, down Eur135
* PX braces for CP decrease in September
European polyethylene terephthalate contract prices for September are facing a drop because of bearish expectations for feedstock PX, sources said.
On Wednesday, PET net contract prices were assessed at Eur928/mt ($1,042/mt), down Eur47 from the end of July.
The decrease was assessed as 0.35 times the decrease in the September monoethylene glycol CP of Eur135/mt. One mt of PET requires about 0.35 mt of MEG and 0.65 mt of PX.
The PET net contract price is the lowest since March 4, when it was assessed at Eur903/mt FD NWE.
The MEG CP for September settled fully Tuesday at Eur851/mt, down Eur135 from the August contract.
Expectations for PX in September are bearish, and the contract price has yet to settle.
Spot prices are hovering around $750/mt FOB ARA, an around 15% discount to the August CP of Eur785/mt.
In a balanced market the discount would fluctuate between 6% and 10%.
“Oil prices have been volatile. Producers are looking at oil carefully [to decide] whether to be aggressive or not,” a source said.
“The volatility index for crude oil has all but doubled in the past two weeks and reached its highest level since mid-March yesterday [Tuesday]. It is therefore virtually impossible to make any reliable predictions about near-term price performance at the moment — indeed such predictions hardly have even a half-life of a few hours right now,” Commerzbank said in a note Wednesday.
