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Ambiguous Terminal Demand Persuades the R-PET Market Fundamentals Globally

Ambiguous Terminal Demand Persuades the R-PET Market Fundamentals Globally

Ambiguous Terminal Demand Persuades the R-PET Market Fundamentals Globally

  • 24-Aug-2022 5:26 PM
  • Journalist: Henry Locke

Various downside risks, such as the Russia-Ukraine war, China’s lockdown against COVID, and unraveling tension with the US and Taiwan, have driven food and energy prices and slowed global economic growth. These aggravated external imbalances have pressured the market sentiments of various recycled plastics, including Recycled Polyethylene Terephthalate (R-PET), in the global region.

The latest data has shown that in the domestic markets of the USA, Saudi Arabia, and Germany, the pricing dynamics of R-Pet have been stable, as cited by continued demand from the existing customers, in the fourth week of August 2022. The market players have informed that a satisfactory amount of the material is available to cater to the demand from the packaging and bottling industries. Furthermore, the sustainability concerns from downstream manufacturers for a few packaging grades have sustained the market growth of R-PET in the domestic region.

In addition, recycling companies have been struggling with mounting energy costs and eroded virgin base material prices. As per the observed market scenario, in Eastern and Southern Europe, the improved offers for base materials have prompted the downstream packaging companies to shift their focus from R-PET and switch back to their non-recycled counterpart. As a result of the ambiguous global macroeconomic fundamentals, the manufacturers have also been offering a discount on the quotations, witnessing the plummeting demand.

On the other hand, despite declining feedstock PET prices in China, the recyclers have managed to pass on the increased crude oil costs in their quotations for downstream manufacturers. In the Chinese domestic market, the price realizations of R-PET have demonstrated an increment of USD 10 per ton on August 24th, 2022, compared to last week’s observed costs. With the rapid uptick in production capacities, the demand has outstripped the supply in the regional market of China.

As per ChemAnalyst, the macroeconomic malaise will further pressure the market fundamentals of R-PET across the nation. The burgeoning crude oil price and the dampening demand outlook from the downstream packaging and bottling sector are anticipated to significantly impact the price realizations of R-PET in the forthcoming weeks.

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