Recycled PET and HDPE Market of Northwest Europe Gains Traction in Festive Season, Prices to Bounce Back in Q1 2022
- 07-Jan-2022 6:22 PM
- Journalist: Timothy Greene
The consistently increasing prices of R-PET and R-HDPE during the last quarter of 2021 in Europe got tamed in December end as the festive period approached. ChemAnalyst last assessed the prices for R-PET food grade and R-HDPE at USD 2270/MT FD Hamburg and USD 1652/MT FOB Hamburg, respectively, in December 2021.
The prices of R-PET and R-HDPE have remained on the higher side in the third quarter of 2021 with inflation in demand primarily from the packaging industry. The extremity of the surge can be estimated from the fact that R-PET food-grade prices decoupled from the prices of their virgin counterparts and rose higher for a major portion of the year. This was particularly due to the low availability of post-consumer R-PET supplies which remained insufficient for fulfilling the demand. However, the scenario has reversed in recent times, as the spot availability of virgin HDPE and virgin PET continued to remain tight since November. The festive period in December further fueled the bearishness in the recycled plastics market, as the demand got depressed with a slowdown in downstream market activities.
As per ChemAnalyst, the prices for R-PET and R-HDPE are expected to kick off again post the festive period dullness as the downstream activities get regular. The commitments by major FMCG companies for using recycled content in the packaging are expected to drive up the demand for R-PET food grade in the market. On the other hand, the high demand for packaged goods during the Omicron scare is expected to propel the high consumption of R-HDPE supplies. Meanwhile, the surge in natural gas energy prices yet again in the European region is expected to increase the virgin-to-recycled conversion cost which shall support the rise in R-PET and R-HDPE contracts by the manufacturers and traders in Q1 2022.