For the quarter ending March 2022
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
The R-PET market in the USA witnessed an unabated rise throughout Q4-2021 consolidating on rising raw material costs as well as strong demand from the downstream industries. The virgin PET raw materials that remained bullish on the back of feedstock supply challenges, caused the recycled market to term stronger in comparison to Q3. The offtakes for R-PET clear flakes in the downstream industrial yarn sector inched upwards at a gradual pace. A major impetus to the R-PET food grade pellets demand was provided by the global brand owners like CocaCola and PepsiCo that raised their R-PET consumption to accelerate their efforts towards achieving the sustainability goals of introducing recycled packaging in their select brands. As the production dwindled with capacity shortfalls, the manufacturers quoted firm contracts on R-PET inventories, causing the prices in the USA to reach USD 2246/MT for food grade pellets and USD 1735/MT for Clear Flakes on FOB basis.
Asian R-PET market exhibited mixed sentiments as the price trends depended on many local factors. In China, the prices for R-PET increased during October backed by production challenges arising due to the inflationary pressure from high-trending virgin PET as well as curtailed productions for saving energy in compliance with China’s “Dual Control Policy”. However, with cooling in the virgin PET market and easing import of waste plastics due to a small relief in port congestion, the R-PET prices in China slumped during the last month of the quarter. The fluctuating demand fundamentals from stable to weak trends caused the R-PET prices in China to settle at USD 887/MT FOB Shenzhen. In India, the R-PET market saw a remarkable transition from raw material cost-propelling price dynamics to demand-driven fundamentals. Indian R-PET prices in Q4-2021 initially inched upwards at a gradual pace stemming from the stronger virgin PET market. However, the market witnessed steep price surges during December owing to a gigantic rise in demand from the beverages sector taking support from the sustainability commitments. Key player Reliance Industries Ltd. was heard remarking that R-PET supplies looked petty against the humongous demand from the downstream sectors. Hence, the traded prices for R-PET spiked to the year’s highest value of USD 1410/MT Ex-Baddi during December.
During Q4-2021, the prices of R-PET increased as the bottle bale-to-flake conversion got impacted by the extreme shortage of energy in Europe. The crippled logistics and supply-chain networks due to the global container shortage caused a limited inflow of post-consumer bottle bales in the region, thereby causing the R-PET prices to stay strong. Meanwhile, the demand for R-PET remained prominent as the FMCG companies in Europe moved ahead on their road to sustainability with increasing investments in R-PET packaging solutions. Striding up to premium numbers, the prices for R-PET Flakes and Food Grade in Germany were assessed as USD 1798/MT and USD 2270/MT FD Hamburg during December.
For the Quarter Ending September 2021
The domestic r-PET market has been going from strength to strength since March, a strong Q2 further catapulted the product among top commodities in the USA. Market participants reported that demand for r-PET has continued to be strong as the virgin PET supply remains constrained in the market. Re-processors and recyclers remarked that given the strong demand, supply has shifted from balanced in mid Q2 to tight in early Q3. Recycled polymers, in general, have gained traction in the US market in terms of demand as key virgin polymers remained tight. Prices of r-PET were assessed between USD 1540-1590 per MT on FOB basis for clear flakes.
The recurrence of Covid cases in South Asia and Southeast Asia has curtailed the outdoor movement which also severely impacted the tourism industry. Used bottle generation and its collection have also been reduced in the wake of the ongoing pandemic which tightened the feedstock availability for r-PET in key Asian markets. Demand for r-PET has been flat in Asia and it was epitomized in the current prices where pricing stands at USD 760-810 per MT on FOB basis.
Supply tightness remained the theme of the 3rd Quarter as curtailed post-consumer bottles (PCBs) availability and its recycling has restricted the production of r-PET in Europe. Demand for the material has been increasing as Europe step ahead towards sustainability, however, a snug supply of virgin material has also augured well for the demand for recycled material. Lockdowns in Europe limited the consumption of beverages bottles in the previous two quarters however vaccination drives have fruition into increasing outdoor activities in European countries. This will likely increase PCB availability and is expected to ease the material tightness in the coming quarter.