Europe R-PET prices fall from record highs on increased supply

06 June 2011 23:59  [Source: ICIS news]

LONDON (ICIS)--European recycled polyethylene terephthalate (R-PET) prices are no longer at record highs because of improved supply, sources confirmed on Monday.

Although availability remains constrained and demand is strong, supply is not as tight as in the March-May period and prices have eased as a result.

Colourless post-consumer polyethylene terephthalate (PET) bottle prices fell from record highs by €50-100/tonne ($74-147/tonne) this week, to €600-750/tonne FD (free delivered) NWE (northwest Europe), because of improved supply. Prices as low as €550/tonne were heard, but these were not seen as representative of the market. Colourless bottle prices had been at historic highs since 7 February 2011.

Mixed coloured post-consumer PET bottle prices are also no longer at historic levels, dropping €50/tonne at the top end, to €500-550/tonne FD NWE, again because of better availability. Mixed coloured bottle prices had been at record highs since 28 March 2011.

R-PET availability is increasing as a result of higher post-consumer collection rates at recycling facilities. Cold weather had limited R-PET supply during the fourth quarter of 2010 and the first quarter of 2011.

Bottled drinks are the major source of post-consumer PET, and cold weather limits post-consumer collection rates because fewer bottled drinks are consumed. There is a lag of around six weeks between higher temperatures and increased availability of post-consumer material. Although temperatures in Europe have been improving since mid-March, the effects have only been felt in the past few weeks.

The easing of post-consumer PET bottle prices has allowed prices across the rest of the chain to decline.

Mixed coloured R-PET flake prices fell by €100/tonne at the top end of the range, to €1,000-1,100/tonne FD NWE, because of improved supply and lower post-consumer PET bottle costs. Mixed coloured flake prices had been at historic highs since 24 January 2011.

Food grade pellet prices have dropped by €50-100/tonne, to €1,500-1,600/tonne FD NWE, because of improved supply and falling costs further up the chain. Food grade pellet prices continue to trade at up to €310/tonne above virgin PET prices, because of commitments among food and beverage packagers to sustainability initiatives. The food grade pellets market is structurally short, and some players predict that food grade R-PET prices will remain at a premium to virgin PET until supply is improved. Food grade pellet prices had been at record highs since 17 January.

($1 = €0.68)

Additional reporting by Caroline Murray

For more on R-PET and PET visit ICIS chemical intelligence

By: Mark Victory
+44 208 652 3214

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