DAK Americas will revise its October polyethylene terephthalate price hike down 3 cents/lb from an initial announcement of 6 cents/lb, the company said Friday in a letter to customers. On September 17, the company announced that it would hike its US PET contracts by 6 cents/lb, citing strength in raw material costs. DAK noted that since the initial announcement, raw material costs have moderated, thus prompting the company to revise.
Amid the revision of the October announcement, the company said that it would seek a 3 cents/lb price increase for PET contracts in November, citing higher continued pressure from feedstock costs. US PET contracts were talked near $1,698-1,720/mt prior to the October increase.
Regarding fundamentals, sources said that lagging demand appeared to be taking a toll on US PET pricing, despite strength in feedstocks. Supply-side conditions remained snug on the back of tight feedstock monoethylene glycol supplies.
The US MEG market has been extremely tight on the back of supply-side disruptions, most notably by Shell at Geismar, Louisiana. The company declared force majeure at its 400,000 mt/year Geismar MEG plant following landfall of Hurricane Isaac on the US Gulf Coast in late August; however, the force majeure was extended in late September following a malfunction during the restart process. It was not immediately clear when the unit would be back online.
The outage has helped to push prices higher and MEG spot values continue to be talked near 55.50 cents/lb amid thin trade and tight supplies.
