For the Quarter Ending September 2022
The cost of R-PET remained idle for more than a month in the North American region this quarter. The consistency in cost was because of the stability in the demand-supply ratio of this product, and companies involved in recycling PET did not enhance their production rates as enough volumes of this product were available in inventories. However, in the final month of this quarter, the cost of this product stepped down as companies preferred virgin PET over this product, and plastics recycling companies were closed owing to summer vacations. Hence, in the U.S., this product concluded its market this quarter at USD 2,370 per MT (for food-grade pellets) on FOB – Los Angeles basis.
Recycled – Polyethylene Terephthalate was experiencing mixed market sentiments in the Asia – Pacific region this quarter. In India, the R-PET market was dull in the month of July; however, it bounced back in August owing to the concerns that arose over the ban on single-use plastics by the Indian government. The other factor which contributed to cost growth was the expanded demand for this product from food and beverage companies for packaging purposes. Yet, in September, the cost fell as companies had procured more of this product in the previous month. When it comes to China, the R-PET market witnessed growth till the fourth week of August, as beverage companies came up with more orders to fulfill the summer demand for their end–products. However, the market went down in September because of the modest interest for this product shown by downstream companies, and so, R-PET closed its market in China this quarter at USD 1,059 per MT on (spot) ex – Shenzhen basis.
The European market of Recycled Polyethylene Terephthalate saw ups and downs this quarter. This product started trading in this quarter with growth in cost; however, it stepped down and remained stable for a while in August and came down further in September. Again, the market grew and stayed idle in the last couple of weeks this quarter. The market was hugely based on the demand that this product was receiving from beverages, plastics, and food companies, as they were concerned more about the soaring energy costs and uncertainties in power supply, which did and could hamper their production activities to a great extent. The events that were taking place in the upstream crude oil market also had an impact on the cost of this product. As of 30th September, R-PET cost stood at USD 2,002 per MT on FD – Hamburg basis.
For the Quarter Ending June 2022
The price of R-PET witnessed an uptrend in the North American Region during the second quarter of 2022. The active inquiries from end-user industries such as food and beverage, automotive, and other vital sectors to incorporate recycled plastics into their products have supported the augmented price trend of R-PET in the domestic market. Constraint feedstock supply and high energy costs caused the recycled plastics market to remain stronger. In the second half of Q2, the market competitiveness due to reduced virgin PET prices and a sharp drop in plastic exports has pressured the price discussions of R-PET. Furthermore, the ban imposed by China and Turkey on plastic imports has also dwindled the plastic scrap supplies in the USA. However, the prices remained firm for RPET Pellets Clear Flakes and RPET Pellets Food Grade Pellets in the USA and were assessed at USD 2160/MT and USD 2645/MT FOB Los Angeles during June.
During the second quarter of 2022, the price of R-PET demonstrated mixed sentiments in the Asia-Pacific Region. The resurgence of COVID cases in China has taken a toll on the economy and hampered trade activities. As a result, a continual plunge was observed amidst stockpiling of products and deteriorating buyer sentiments. Industrial production faced pressure from insufficient market demand and continued to battle shipping delays as ports in China remained clogged up. In India, R-PET prices were observed to be on a bullish run throughout Q2 amid robust demand from the downstream packaging sector. The worsening ties between Russia and Ukraine and the stringent COVID restrictions on China have severely disturbed the market equilibrium. The constrained supply of post-consumer bales coupled with elevated crude oil prices and freight charges has supported the uplifted price discussions of R-PET in the domestic Indian market. In June, the recycled polyethylene terephthalate (R-PET) prices in China observed for R-PET Flakes were USD 1050/MT on a FOB basis.
The constrained supply of post-consumer bales and elevated crude oil prices have imparted substantial cost pressure on R-PET prices in the European region. The supply turmoil unleashed by Russia's invasion of Ukraine has prompted upward pressure on the key energy raw materials, driving manufacturing costs higher. Also, the robust demand for recycled plastics from the automotive industry and an increase in e-commerce have all contributed to a positive market outlook. The market participants have emphasized using recycled plastics for sustainable development, inflicting R-PET's price discussions to soar further in the regional market. The strong buying sentiments provoked the high price levels of R-PET in Germany, which settled for R-PET Food Grade USD 2568/MT FD Hamburg.
High demand in the American market was observed during the first quarter of 2022 because of growing consumer concerns regarding plastic pollution. This propelled big companies to adopt a sustainable approach and opt for recycled plastics, further fuelling the prices of R-pet in the North American region. The prices of R-PET increased 14% from Dec 2021 to March 2022 and settled at USD 2550/tonne by the end of March’22. From the beginning of the year, labor shortages in the domestic market affected the production rate and supply chain. The prolonged port congestion also impacted the supply. Overall, the prices rose in the North American region.
The prices of R-PET increased in the Asian region during the first half of quarter 1 of 2022 which later got stabilized in the second half. In the Indian market, sudden demand from the end-user beverage industries impacted the prices especially when the Government restricted the use of “Single-use plastics” in the domestic market. Because of the capacity restrictions from manufacturers like Reliance, supply shortages created the demand-supply gap, and the prices rose around 8% in January since Dec 2021. Although feed PET prices decreased in the domestic market, R-PET prices increased because of unexpected demand. In India, the accessed prices were USD 1548.33/tonne by March 2022. The hovered prices were USD 1275 /tonne, with a rise of 23% in China by the end of March 2022.
The prices of R-PET increased in the European region and rose about 15% from Dec 2021 to March 2022. High energy costs impacted the production cost, which significantly rose the prices in February. High freight rates and shipping costs affected the supply of feed PTA (Purified Terephthalic Acid) from exporting countries. Due to a shortage of raw materials in the upstream PET industry and increased production costs, the prices rose by 10%. The surge in price slowed down by the end of the quarter with an increase of 4% in March. The R-PET prices remained strong in Germany and were assessed at USD 2600 /tonne by the end of the first quarter of 2022.
For the Quarter Ending December 2021