R-PET Saudi Arabia Tumbles on Lower Input Cost and Stagnated Demand Pattern

R-PET prices in Saudi Arabia have continued to trace downward trajectory following the low input cost and stagnated demand pattern across the region. Consistent yet gradual fall in virgin PET prices throughout December has continued to influence the overall RPET prices in early January as well. It has been observed that the availability of virgin-PET at a relatively cheaper rate has influenced RPET prices in the near term.

Weak crude values in late November and December and low cost of virgin PET provided room for the manufacturers to raise their output. The situation led to ample availability of cargoes amidst the stable demand pattern. Following the narrowed demand and supply gap, RPET prices have registered a drop by nearly 10% during Q4 2021. Although the offtakes from downstream beverage sector marginally improved by late December due to higher beverage demand in Christmas and New Year celebrations, however it has not been enough to revive the prolong dullness in RPET prices since the last once month.

As manufacturers kept pace with market competitiveness where beverage demand became relatively stagnant, they tried to keep RPET prices below virgin PET to initiate active offtakes. The idea well served in the short term as the offtakes marginally increased in late December.

As per ChemAnalyst, Prices of R-PET are likely to remain range bound following the steadiness in the demand from the beverage sector. However, firm energy prices since the beginning of January may constraint the efficient use of energy intensive recycling processes making its availability limited in the coming weeks.