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Strong pre-buying in Sept supported NWE Oct polyethylene terephthalate price rise

Pre-buying in the Northwest European polyethylene terephthalate market in September combined with scheduled turnarounds in the fourth quarter supported an increase in the October spot price, according to sources.

The Northwest European PET spot price was assessed at Eur910/mt FD NWE Wednesday, marking the third consecutive weekly rise and strengthening Eur20/mt from its seven-month low of Eur890/mt on September 9.

Producers’ push for a price increase was supported by pre-buying in September, which tightened the spot market, according to sources.

“A wave of pre-buying happened,” a trader Continental Europe said.

A second trader said the “low price” in the first half of September had spurred converters to pre-buy.

Converter buy interest was underpinned by stronger-than-expected PET demand thanks to continued good weather, especially in Southern Europe. Many sources previously said uptake in September was firm for the time of year.

Producer claims for a price increase have also been supported by scheduled turnarounds in the fourth quarter.

Major suppliers, including Indorama, Novapet and Lotte Chemical are expected to reduce production in October and November, as maintenance works begin. Some producers have prioritized contractual production, offering limited volumes on the spot market.

“Turnarounds and stockbuild removed some excess capacity in Q4,” a third source said.

Sell ideas were heard pegged in the range Eur910-950/mt this week, with producers saying there was “little difficulty” settling within the Eur910-920/mt range.

Some converters accepted the price increase for October, pegging buy ideas at Eur910/mt.

“October seems that the prices are going up,” a converter source said. He added that the price increase may only be the beginning and there may be further price hikes during the month.

Import interest was also heard waning, which will further reduce supply in Europe.

But some sources disagreed, turning bearish on the market. The first trader source said the price increase met a lot of resistance from converters.

He added, “the wave of purchases has gone and passed” and that buy activity will slow for the rest of the month.

The second trader said the price increase will be “case by case” and that the average price for October will be around Eur900/mt, steady from the average price for September.

In the UK, the spot price strengthened GBP5/mt week-on-week to an assessment of GBP675/mt FD UK Wednesday, reflecting similar conditions to Continental Europe.

Sell ideas were heard pegged in the range GBP685-695/mt, while trades were heard completed this week in the range GBP660-675/mt for October.

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