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US PET imports rise on price, global glut; payment in dollars is incentive

HOUSTON, September 20, 2016 (PCW) -- US imports of packaging-grade PET are up 11% this year through July as prices have been 4-5 cpp lower than US produced PET resin.

Import prices Tuesday were steady at 48.5 cpp delivered duty-paid US ports. Similar quality PET resin produced in the US, for bottle and packaging applications, was at 53.5 cpp railcar delivered Chicago.

The US remains an attractive market for PET producers around the world. A major reason for this is payment in US dollars, which nets most sellers a higher price than other currencies. Sellers can typically rely on getting paid in a timely manner for their US shipments.

Also, PET is in oversupply globally. Giant new projects like M-G Chemicals' PET plant in Corpus Christi, Texas, are adding to this. With the supply backdrop, global PET suppliers and distributors want to lock in good  relationships with US PET end-users they see as good long-term customers.

The flow of PET to the US has continued this year despite three major supplier countries having been knocked out of the market by anti-dumping duties imposed last year. (Please see table).

China, India and Oman, all hit with duties, collectively accounted for just 924 metric tons of imports through July, compared to 78,036 mt in January-July 2015. Canada was also hit with antidumping duties last year but remains the third largest PET import supplier after Mexico and Taiwan. The duty rate for Canada is about 13% of the value of the PET being imported. This means, for instance, that a load valued at $1 million requires that a cash bond of about $130,000 be posted with US Customs and Border Protection before cleared for entry.

The gap from PET not coming from China, India and Oman has been filled by several countries, including Brazil, which now accounts for 11.5% of imports, and Taiwan, which showed a 130% increase in imports in the first seven months of 2016 form the year-earlier period.

Also, three new supplier countries have emerged this year: Japan, Morocco and Saudi Arabia. -- Xavier A Cronin

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