25 February 2013 15:31 [Source: ICIS news]
LONDON (ICIS)--European recycled polyethylene terepthalate (R-PET) colourless flake demand from the downstream packaging sector has increased by up to 20% from January, according to market estimates on Monday.
Consumption in February 2012 is broadly in line with February 2013, nevertheless, February 2012 saw similarly strong demand from the packaging sector.
The peak season for packaging begins in March, and winter weather limits the availability of post-consumer bottles – which are the major feedstock for the R-PET chain. This is because fewer bottled drinks are consumed when temperatures are cold.
Demand from the end-use fibre and strapping markets remains weak, however, this is being counterbalanced by the strength of packaging demand.
Conversely, some sources said that although large packagers are increasing demand, small pre-form producers – which they argued constitute the bulk of the market – are avoiding purchases on expectation of lower virgin polyethylene terephthalate (PET) prices.
In several end-use markets, virgin PET is a direct competitor of R-PET and purchases are predominantly driven by cost.
Since 2010, though, R-PET prices have become broadly decoupled from virgin PET prices because sustainability initiatives have overtaken cost as the main driver for purchases. This has been particularly true of the packaging industry.
($1 = €0.76)
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