01 July 2013 16:46 [Source: ICIS news]
LONDON (ICIS)--European recycled polyethylene terephthalate (R-PET) demand across the second quarter is 20-25% below the same period in 2012, market sources estimated on Monday.
The reduction in consumption was attributed to poor macroeconomic conditions, limiting consumer purchasing power in the fibre and construction end-use markets, and below-average temperatures delaying the start of the bottling season.
Fewer plastic bottled drinks are consumed when temperatures are low and a prolonged winter has meant that the bottling season is only now beginning across most of Europe.
“It feels that demand is very slow... as they don't have as much production and they have full stocks still. [The] situation is more difficult and more complicated and [end-users] don't need to produce. If a lot of customers have summer breaks it means [the] situation will be more and more difficult. We hope [the] situation will improve a little, but we don't know, compared to previous year it's completely different,” an R-PET flake buyer said.
End-use demand from the bottling sector is expected to increase in July as a result of rising temperatures. Nevertheless, inventory levels throughout the R-PET chain are high and stockpiles will need to be worked through before higher end-use demand has an impact on R-PET prices.
A food grade pellet producer said that the lack of summer and high inventories were the main issues. "We start to experience some summer but it's not as fast as hoped for," said the producer, adding that the "second quarter this year is 20-25% down on quarter two last year.”
($1 = €0.77)
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