Actual and anticipated shipping delays caused by tensions in the Middle East are exerting pressure on the polyethylene terephthalate (PET) value chain. Caroline Murray, ICIS senior editor for PET in Europe, takes a closer look at the situation in the Red Sea and discusses the impact for Europe
“On one side it’s a gift from heaven for the European PET producers, but on the other side it may be a curse,” a source said. Indeed, sellers are already individually seeking higher PET prices for January.
“I’m getting frightening information: most import offers are on hold. European [suppliers] plan on increasing the price dramatically, because of the Suez Canal situation and delays,” a buyer said.
Of course nobody knows how intense the problem really is and how long it will last.
The timing of a fresh shipping crisis is terrible, what with market participants ready to step away from their offices for the holidays.
“We are not offering and will open the shop again next year when we know about availability and costs,” a producer said.
Raw material purified terephthalic acid (PTA) deliveries may also be affected.
“For sure companies that buy imported PTA will be impacted. In Europe there are approximately 0.9 tonnes/year of PTA coming from Asia, and none of the European PTA producers can react overnight,” a second PET producer said.
Some vessels have already been rerouted and will provoke delays of 20-30 days. Shipping companies are incurring additional costs as they divert cargoes, and prices have been modified up to reflect this.
Prices of $2,400 per 20ft container from Vietnam to Europe were heard, up from three-figure prices less than two months ago. A trader said on Thursday that the price had since shot up to $4,000 per 20ft container for January shipment.