European PET Market Continues Upward Price Movement, Entering April 2024

The European Polyethylene Terephthalate (PET) market embarked on a bullish trajectory as it stepped into April 2024, building upon the significant upward momentum witnessed in March 2024. Germany, a key player in PET market, saw PET prices rise by approximately 0.7% during the initial week of April 2024, following a notable 1.16% increase in March. This surge in prices was spurred by heightened demand downstream, coinciding with the Ester break festivities and the onset of April. Suppliers, keen on boosting future demand, swiftly filled their order books for April.

Meanwhile, across Europe, PET raw materials experienced modest increases in March 2024. In Germany specifically, PET feedstock such as Mono Ethylene Glycol (MEG) surged by about 4.2%, while Purified Terephthalic Acid (PTA) saw a 0.5% uptick in the domestic market. These upward movements in feedstock prices were likely influenced by the bullish sentiment prevailing in crude markets, propelled by surging oil prices driven higher by a drone attack on a major Russian oil refinery and escalating tensions in the Middle East. Consequently, downstream petrochemical prices soared, potentially constraining further margin recovery for European PET resin producers due to increased raw material costs. Despite this, downstream customers maintained a conservative outlook on demand, holding minimal stock levels in anticipation of possible price decreases in the upcoming months. Domestic producers, having experienced partial margin recovery since January 2024, have witnessed several production lines restarting, with most operating at close to full capacity following robust March sales.

Additionally, on the shipment freight front, prices continued to fluctuate. For instance, the shipment price for the China to North Europe route witnessed a decline of over 27% in March 2024, followed by a growth of more than 2% during the first week of April from the previous week. Similarly, freight charges for the Northern Europe to China route decreased by approximately 10% in March but grew around 3% during the first week of April 2024. These fluctuations add another layer of complexity to the dynamics of the PET market, influencing trade patterns and pricing strategies.

Notably, lead PET producer, Alpek UK resolved production issues, Equipolymers reportedly restarted its second line, and Polisan is set to resume operations after a prolonged shutdown. Throughout April, the European market, including countries like the UK, Belgium, Italy, and the Netherlands, mirrored the trends observed in Germany.

In conclusion, analysts anticipate an upward trajectory in PET resin prices in the European region, driven by downstream demand and cost pressures stemming from PET feedstocks, against the backdrop of geopolitical tensions and fluctuations in crude oil prices.