SHANGHAI (ICIS)--KP Chemical, South Korea's largest polyethylene terephthalate (PET) bottle chip producer, is planning to raise the output at its 450,000 tonne/year plant in Ulsan from 80% to 100% next week because of improved market conditions, a company official said on Friday.
KP plans to increase its PET output after the decline in raw material purified terephthalic acid (PTA) and monoethylene glycol (MEG) prices eased an earlier squeeze on PET margins, the company official said.
The company reduced its plant's run rate in early October because of uncertain market conditions in the fourth quarter.
Average spot PTA prices were at $1,145/tonne (┬824/tonne) CFR (cost & freight) China for the week ended 28 October, down by 4% from early October. Spot MEG prices dropped to $1,165/tonne CFR China for the same week, down by 5.5% from early October, ICIS data showed.
⌠Even though PET prices are declining, raw material prices are falling even faster, the company official said. ⌠Margins for PET are starting to see some recovery.
The average spot price for bottle grade PET was at $1,550/tonne FOB (free on board) Korea for the week ended 28 October, down by 6.1% from early October, ICIS data showed. PET has been falling since the middle of September, when the average spot price was at $1,730/tonne FOB Korea.
⌠When there is a sharp downturn in feedstock prices, there is a short-term improvement in margins, said a southeast Asian PET maker. ⌠The lower prices also help to boost demand.