All but one US PET producer was on board for a January price increase, industry sources said Monday.
Wellman was the sole producer not to have issued a 3 cents/lb price hike for January 1, but the company could simply push whatever it does not get from December's 6 cents/lb increase to January, a PET seller said.
Producers had issued 6 cents/lb price increases for December but on December 14, Eastman revised the increase lower to 4 cents/lb and at the same time announced the 3 cents/lb hike for January. Other producers followed Eastman's January nomination but none of the others cut their December increases.
Price increase nominations only indicate the maximum a producer can get in a given month. Since there is plenty of PET in the US market, producers typically are only able to raise prices by the amount raw material costs rise. In December costs are up about 3 cents/lb and sources said that would make December resin prices go up by the same amount, though some producers were fighting for a 1 cent/lb margin increase. Depending how much of an increase is accepted, domestic prices were expected to be at and over 76 cents/lb delivered.
If the market goes up 3 cents/lb in December, Wellman's January target becomes 3 cents/lb, the same as other producers issued formally.
Producers have plenty of support for higher prices in January as paraxylene costs are tapped to go higher. The US PX contract takes its cue from Asia and in Asia producers nominated their contracts in a range from $1,400-$1,430/mt, up at least $125/mt from December's $1,275/mt CP. Considering the H1 and H2 January spot market was at $1,389-$1,394/mt, most participants expected contracts to increase in Asia and then in the US.
This left the question for January PET contracts, not if, but how much they would go up.
--Benjamin Morse
Wellman was the sole producer not to have issued a 3 cents/lb price hike for January 1, but the company could simply push whatever it does not get from December's 6 cents/lb increase to January, a PET seller said.
Producers had issued 6 cents/lb price increases for December but on December 14, Eastman revised the increase lower to 4 cents/lb and at the same time announced the 3 cents/lb hike for January. Other producers followed Eastman's January nomination but none of the others cut their December increases.
Price increase nominations only indicate the maximum a producer can get in a given month. Since there is plenty of PET in the US market, producers typically are only able to raise prices by the amount raw material costs rise. In December costs are up about 3 cents/lb and sources said that would make December resin prices go up by the same amount, though some producers were fighting for a 1 cent/lb margin increase. Depending how much of an increase is accepted, domestic prices were expected to be at and over 76 cents/lb delivered.
If the market goes up 3 cents/lb in December, Wellman's January target becomes 3 cents/lb, the same as other producers issued formally.
Producers have plenty of support for higher prices in January as paraxylene costs are tapped to go higher. The US PX contract takes its cue from Asia and in Asia producers nominated their contracts in a range from $1,400-$1,430/mt, up at least $125/mt from December's $1,275/mt CP. Considering the H1 and H2 January spot market was at $1,389-$1,394/mt, most participants expected contracts to increase in Asia and then in the US.
This left the question for January PET contracts, not if, but how much they would go up.
--Benjamin Morse
