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Pet (and Raw Materials) Negotiations for 2021… Are You Ready?

October 07, 2020 | Javier Rivera

2020 has not been a normal year and while the PES chain always has challenges, the effect of the COVID-19 pandemic has impacted all market drivers in many different ways, forcing the industry to redefine itself and act to take advantage of current opportunities, as well as to understand and be prepared for the new trends.

Although polyester and PET continue to be global markets, negotiations for 2021 will be different depending on the region and the product in the chain. Price volatility and availability of feedstocks, supply chain risk management, supply and demand balance, percentage of contract or spot volumes, commercial/purchasing policy, trade measures, new consumer behaviour trend, sustainability, and other factors, need to be taken into account.

We analyse below the main drivers and aspects to be considered in each region for 2021 negotiations. Reach out to us for more information, we would be pleased to hear from you, as well as to share how we help companies like yours to overcome the challenges the industry is facing.

The starting point for the 2021 negotiations are historically low PET prices in all the regions, a result of the low cost of the main raw materials, as well as low margins throughout the polyester chain. The graph reflects the daily PET price fob Asia, broken down with accumulated deltas/prices of the main raw materials in PET equivalent figures.

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