“June is extremely tight. July will be pretty tight as well. I thought there could be a relevant [price] drop late August and September, but now I am not sure. All the time there are surprises,” a trader said.

The combination of a heavily contracted environment in Europe and a series of unplanned shutdowns across the globe have created chaos.

The market is dry. What small, domestic volumes are being made available for spot are priced over €1,350/tonne FD (free delivered) Europe, so around €300/tonne higher than where the year began.

PET: 2018 Feb – Jun

The dire situation is not limited to a few customers who planned to buy in additional spot as and when they need it.It includes small and large buyers left stranded by a string of production problems.

“The market is structurally oversupplied and most of the oversupply is in China, but still it is running out of PET. It’s a crazy situation,” a converter said.

Even if the BP force majeure on upstream purified terephthalic acid (PTA) were to be lifted this week, relief would not be immediate.

Europeans are “completely sold out”.

A reseller said: “[There are] producers who are in trouble now because of BP, then next month producers will be in trouble because of Hanwha, [the force majeure on PTA in South Korea].”

There are still a few customers waiting to see if prices start to drop, but the focus for many is on securing volume, and price is inconsequential at the moment.

“It’s crazy and can be that €1,400/tonne [FD Europe] is not the end,” a producer said.

The last time these sort of prices were reached was in 2012, but then raw materials and crude oil were much more expensive than they are now.

PET vs MEG and Paraxylene: 2013 – 2018

Crude (USD/bbl) 2013 – 2018

PET is used in fibres for clothing, containers and bottles for liquids and foods, thermoforming for manufacturing, and in combination with glass fibre for engineering resins.