US PET bottle resin prices were expected to increase 3 cents/lb ($66/mt) in January from a rough estimate of $105/mt or more increase in the month's paraxylene contract, industry sources said Tuesday.
"We'll be in the high 70s (cents/lb) in January," a PET producer said.
The US PX contract tends to follow the Asia contract price movement and in Asia the PX CP settled up $105/mt to $1,380/mt. Assuming the US also goes up $105/mt or 4.76 cents/lb, the PX contract would be at about 67.76 cents/lb. Since the contract typically settles in increments of 0.25 cents/lb, the US contract could be expected to increase 4.75-5 cents/lb over December's CP.
US PET prices also follow raw material gains which means a 4.75 cents/lb jump in PX would amount to about a 2.77 cents/lb increase in costs per pound of PET. The formula derived PTA contract, however, is to contain more than simply a pass through of PX in January, a buyer said. The PTA formula has an energy variable that is adjusted quarterly and since crude oil prices have gone up in Q4 2010 the change was expected to be seen in January's PTA formula. Instead of costs climbing 2.77 cents/lb, costs could go up as much as 3 cents/lb, the PTA buyer said.
PET producers had anticipated such an increase in costs and issued a 3 cents/lb bottle resin hike for January. Despite it being the weak season in PET demand, prices were expected to go up again in February.
"We'll probably see another increase for February since spot PX is still strong in Asia," a producer said.
--Benjamin Morse
"We'll be in the high 70s (cents/lb) in January," a PET producer said.
The US PX contract tends to follow the Asia contract price movement and in Asia the PX CP settled up $105/mt to $1,380/mt. Assuming the US also goes up $105/mt or 4.76 cents/lb, the PX contract would be at about 67.76 cents/lb. Since the contract typically settles in increments of 0.25 cents/lb, the US contract could be expected to increase 4.75-5 cents/lb over December's CP.
US PET prices also follow raw material gains which means a 4.75 cents/lb jump in PX would amount to about a 2.77 cents/lb increase in costs per pound of PET. The formula derived PTA contract, however, is to contain more than simply a pass through of PX in January, a buyer said. The PTA formula has an energy variable that is adjusted quarterly and since crude oil prices have gone up in Q4 2010 the change was expected to be seen in January's PTA formula. Instead of costs climbing 2.77 cents/lb, costs could go up as much as 3 cents/lb, the PTA buyer said.
PET producers had anticipated such an increase in costs and issued a 3 cents/lb bottle resin hike for January. Despite it being the weak season in PET demand, prices were expected to go up again in February.
"We'll probably see another increase for February since spot PX is still strong in Asia," a producer said.
--Benjamin Morse
