Europe PET Market Stabilizes in August as Sellers Consider September Increases

Europe’s PET bottle market stabilized in August after three consecutive months of declines, as suppliers found it difficult to fully transfer higher costs to buyers amid cautious purchasing. Producers initially targeted larger increases, but buyer resistance during negotiations reduced the final gains, with most transactions settling at rollovers to modest increases.

With August concluded, sellers are preparing for potential price increases in September. However, the size of any hike remains uncertain as the market awaits the August PX settlement, while fluctuations in crude oil prices continue to create uncertainty around production costs.

August Price Hikes Fade During Negotiations

PET suppliers entered August seeking increases of up to €50/ton, supported by higher upstream costs and ongoing logistics disruptions. However, buyers resisted these targets, helped by comfortable inventory levels and limited pressure to replenish stocks.

By the end of August, transactions in Italy and Northwest Europe were largely concluded at rollovers to increases of around €10-20/ton. This confirmed that the market had stabilized rather than achieved a significant recovery following the decline recorded from May through July.

The August MEG contract eventually settled €20/ton higher at €1,035/ton FD NWE, providing additional cost support to sellers. The PX settlement, however, remained pending as September began.

PET Demand Remains Muted Despite Seasonal Support

PET resin demand remained weaker than expected throughout August, despite seasonal consumption from beverage and mineral water applications. Although summer demand was present, it did not generate a corresponding increase in resin purchasing.

Buyers generally maintained a cautious approach, with comfortable inventories reducing the need for additional material. Some converters were still receiving previously purchased cargoes, while others remained inactive during holiday closures. Limited visibility on new orders also discouraged restocking.

Heading into September, buyers do not anticipate an immediate improvement in end-user demand. Several converters remain adequately stocked and therefore have little urgency to secure fresh volumes, suggesting that the post-holiday return to the market could be gradual.

Elevated Freight Costs Limit Import Pressure

Competition from imports remained relatively restrained in August. High freight and logistics expenses reduced the attractiveness of overseas cargoes, while longer and less predictable supply chains encouraged buyers with immediate requirements to source mainly from European suppliers.

However, limited import competition did not provide enough support for domestic producers to achieve stronger price increases. Comfortable inventories and weak purchasing interest continued to counterbalance the impact of higher logistics costs.

September Hikes Under Consideration

As September gets underway, sellers are looking to protect margins and are considering another round of price increases. The €20/ton rise in MEG offers some cost justification, while Brent crude moving back above $90/bbl amid renewed US-Iran tensions and continued disruption around the Strait of Hormuz has added further uncertainty to the upstream cost environment.

The pending PX settlement remains a key factor in determining the overall cost picture. One distributor indicated that initial September market ideas point toward limited increases following the MEG settlement, although the final size of the hikes is expected to depend heavily on PX.

Buyers also anticipate renewed attempts from suppliers to raise prices but remain doubtful about how much of these increases can actually be implemented. Comfortable inventories, limited order visibility and the slow return from the summer break continue to restrict purchasing urgency.

As a result, September is likely to begin with sellers testing moderate increases rather than seeking a sharp price recovery. Higher feedstock costs could establish stronger support for PET prices, but without a clear improvement in resin demand, suppliers may once again find it difficult to pass the full cost increases through to buyers.

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