Valplastic restarts R-PET flake plant after one-day shutdown

04 May 2010 14:45  [Source: ICIS news]

LONDON (ICIS news)--Valplastic has restarted production at its 30,000 tonne/year recycled polyethylene (R-PET) terephthalate plant near Venice, Italy, following a 24-hour shutdown, a company source confirmed on Tuesday.

The plant, which makes colourless, hot-washed flake material, was shut down on 1 May and restarted the next day, the source said, adding that the unit was now operating at full capacity.

The source said the reason for the one-day stoppage was linked to public holidays in many European countries at the start of the month.

However, on 26 April, the company said that production at the plant would be suspended at some point during the first week of May due to difficulties in sourcing material. At that time, it was unclear when the plant would restart.

The European R-PET market has been in tight supply since the fourth quarter of 2009.

Initially, low collection rates at recycling facilities due to severe winter conditions across Europe slowed sales of drink bottles, which is the major source of post-consumer polyethylene terephthalate.

Additionally, the weight of virgin PET bottles was reduced by 20% in 2009, according to market estimates, which meant more bottles were needed to produce each kilogramme of R-PET.

Sources said that the global economic downturn and concerns over the environmental impact of plastic bottles had caused further reductions of PET bottle consumption, by around 20% year on year in 2009.

Despite market sources’ estimates of an increase in collection rates of 6-7% from February to March, it was not thought that this would be enough to remedy supply problems, as the increase coincided with higher buying interest in Asia, where customers turned to European R-PET due to shortages of virgin PET in that region.

According to European exporters, the buying interest in Asia was now decreasing, but domestic European demand was increasing due to improved macroeconomic conditions.

Some sources in the flake market added that warmer weather in Europe had seen an increase in construction demand, which had boosted downstream strapping consumption.

As a result, on 26 April, European R-PET prices across all sectors, except food grade, hit their highest point since ICIS records began in June 2006, buyers and sellers confirmed.

Colourless bottles were trading at €360-500/tonne ($474-658/tonne) FD (free delivered) NWE (northwest Europe), an increase of €40/tonne from the top end of last week's range, players reported.

The previous high was €460/tonne, recorded from 16 June to 3 November 2008, according to global chemical market intelligence service ICIS pricing.

Prices of mixed-coloured bottles hit €180-330/tonne FD NWE, an increase of €10-80/tonne from last week, sources said. The previous high was €250/tonne, from 4 June 2007 to 9 June 2008.

Colourless flake prices reached €840-900/tonne FD NWE, an increase of €15-50/tonne from last week, according to market players.

Some sources said they saw prices as high as €950/tonne, but this was not widely confirmed. The previous high was €885/tonne, reported from 16 June 2008 to 3 November 2008.

Prices of mixed-coloured flake were stable at €600-750/tonne FD NWE, sources said.

On 29 March, mixed-coloured flake prices hit highs of €570-700/tonne. The previous high was €650/tonne, seen from 16 June 2008 until 3 November 2008.

The highest prices were seen in the Italian and German markets, where supply was tightest, sources said.

The R-PET market was expected to remain in tight supply throughout the second quarter, which is traditionally the peak season for demand. As a result, some players were forecasting further price rises in May.

($1 = €0.76)

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By: Mark Victory
+44 208 652 3214

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