AFPM ’18: Supply concerns continue to drive US PET market
Tight supply ahead of peak consumption season weighs heavily on the US polyethylene terephthalate (PET) market, heading into this year’s International Petrochemical Conference (IPC).
US resin buyers have faced short supply since last autumn amid reduced Americas capacity and fewer imports. These conditions should persist as demand builds to summer, when beverage-bottle consumption peaks.
The market will gain clarity, if not immediate resin relief, this spring on two key supply drivers. The US asset sales of bankrupt Americas producer Mossi & Ghisolfi’s (M&G) is wrapping up. A joint venture of Alpek, Indorama and Far Eastern New Century (FENC) agreed this week to purchase M&G's PET/purified terephthalic acid (PTA) complex in Corpus Christi, Texas. Second, a preliminary determination is expected by 27 April in the US’ antidumping investigation of resin from Taiwan, Brazil, South Korea, Pakistan and Indonesia.
M&G’s lost US capacity is expected to begin returning later this year. M&G sold its 360,000 tonnes/year West Virginia plant in January to Taiwan PET producer FENC. No start-up date has been set, a company official said, but the market anticipates it will start after the second quarter.
The joint venture partners have not released a timetable to complete and start up the Corpus Christi plant, but the market expects late 2019 at the earliest. At planned capacities of 1.1m tonnes/year PET and 1.3m tonnes/year PTA, it would be the world’s largest PET plant. The purchase expands the US footprints of Alpek, whose subsidiary DAK has a US presence, and Indorama. FENC is a new player in the US market.
Regarding imports, most market participants expect the US to impose duties in the case. The import market tightened in late 2017 as resin shipments from those countries began to slow. Buyers were pushed to find alternative sources of resin.
Meanwhile, the PET market has faced cost pressures early in 2018 from firming feedstock prices. Contracts rose for both PTA and monoethylene glycol (MEG), the latter of which faces tight supply.
As demand builds ahead of the bottle drink season in the US, the market will remain tight. Securing resin is a top priority to meet demand.
Major US PET producers are DAK, Indorama and Nan Ya.
Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 25-27 March in San Antonio, Texas.
