21 February 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--European recycled polyethylene terephthalate (R-PET) colourless flake prices extended their record highs by €30-150/tonne ($41-205/tonne) this week due to tight supply and strong demand, sources said on Monday.
R-PET colourless flake was trading at €1,100-1,200/tonne FD (free delivered) NWE (northwest Europe), as assessed by ICIS.
The previous record high of €1,100/tonne FD NWE, first established between 28 June and 16 August 2010, was equalled on 17 January. There have been further rises in the past few weeks.
Prices across the R-PET grades have been at record highs since 31 January 2011.
ICIS records for R-PET prices began on 19 June 2006.
High demand across all R-PET grades was the result of several factors.
Virgin polyethylene terephthalate (PET) consumers were introducing R-PET content as a lower-cost alternative because of tight supply and high prices in the virgin PET market, players said.
Global cotton shortages resulting from flooding in Taiwan and Pakistan in the fourth quarter of 2010 were causing downstream textile players to use synthetic alternatives such as R-PET as a replacement for cotton. This would lead to higher demand from the downstream textiles market until at least May, when the next cotton crop was due, according to sources.
Tight supply was both the result of strong R-PET consumption and low collection rates at post-consumer recycling facilities. Cold weather limits bottled drink consumption, and bottled drinks are the major source of post-consumer R-PET material. This was most apparent in eastern Europe, where weather conditions were most severe, players said.
R-PET consumers said that with demand so strong and availability so tight, pricing discussions were secondary to obtaining material, leading to expectations that R-PET values would increase further in March. Nevertheless, they added that the extent of any price rise would not be known until upstream virgin PET March contracts were finalised.
($1 = €0.73)
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