UK virgin PET gains on weaker pound, stockpiling

New York — The UK virgin polyethylene terephthalate market bucked the polymer trend this week as spot prices posted gains amid robust demand for food and beverage packaging and a weaker GBP/EUR exchange rate making imports more expensive.

UK consumer stockpiling of food and bottled water led to increased packaging volumes being demanded from converters, industry sources said. This, coupled with concerns over supply logistics of imported material from the continent, led to more demand for domestic UK supply with some buyers stockpiling product.

For the most part, UK converters were trying to source material from within the UK, the sources said. However, as many were placing emergency calls with suppliers for extra volumes, some were finding it difficult to source the required volumes, they said.

"There's not enough supply to just go domestic," one converter said. "We're continuing to import [from Northwest Europe] and increasing our stock... to seven days supply."

Buyers continued to place orders for April delivery form Northwest Europe, but noted concern about tightening border controls.

Volatile foreign exchange rates and increased demand were also having an impact on prices. Sellers said that offers were now only valid for a maximum of 24 hours as they sought to protect against foreign exchange movements and manage outgoing inventories.

UK virgin PET spot prices closed at GBP760/mt FD UK on Wednesday, up GBP30/mt from a week earlier.