Europe PET Prices Stay Under Pressure as Rising Crude Creates Market Uncertainty

Europe's PET bottle market continued to soften in the second half of July, although the pace of price declines slowed compared to earlier in the month. The recent rebound in crude oil prices, driven by renewed geopolitical tensions in the Middle East, has made producers more cautious about offering further discounts. At the same time, healthy inventory levels across the supply chain and moderate buying activity have continued to limit any meaningful market recovery.

While PET prices in both Italy and Northwest Europe moved lower last week, the corrections were less severe than those seen at the beginning of July, with the lower end of the market slipping below €1,250/ton FD. Meanwhile, the June paraxylene (PX) contract settled €85/ton lower than May, reducing production costs for PET manufacturers. Despite the recent correction, European PET prices still remain well above the levels seen before the Middle East conflict earlier this year.

Sellers become more cautious after crude oil rebound

Throughout July, suppliers reduced prices to encourage buying activity. However, sentiment changed after crude oil prices recovered sharply, increasing uncertainty over future feedstock costs.

Many producers are now reviewing their pricing strategies instead of continuing aggressive discounts. Some suppliers indicated they may temporarily pause fresh offers until there is more clarity on upstream cost movements, while others believe any further reductions will be limited if energy prices remain elevated.

Demand remains steady but lacks momentum

Although hot weather across Europe has supported bottled water consumption, overall PET demand has remained stable rather than strong. Buyers continue purchasing only for immediate production needs, supported by comfortable inventory levels accumulated earlier in the year.

Several converters have already secured sufficient material for upcoming production, while others have delayed new purchases due to ample stock. Market participants also noted that consumer demand for beverages remains restrained, with spending patterns still cautious despite the seasonal peak.

Higher energy costs create uncertainty for the weeks ahead

The recent rise in crude oil prices has made the market outlook less predictable. Earlier expectations of continued PET price declines have weakened as producers face increasing feedstock costs and renewed concerns over regional energy supplies.

Even so, most participants believe the market will continue to be influenced primarily by supply-demand fundamentals. Comfortable inventories and cautious purchasing behavior are still preventing a strong recovery, although firmer upstream costs could help stabilize prices or reduce the scope for further declines if they persist.

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