07 November 2013 21:11 [Source: ICIS news]
HOUSTON(ICIS)--Bottle bale prices for US recycled polyethylene terephthalate (R-PET) fell on both coasts on Thursday, as sources indicated that excess supply due to China’s Green Fence policy continues to hurt the market.
On the west coast, R-PET bottle bales prices fell by 2 cents/lb ($44/tonne, €33/tonne) to a range of 26-30 cents/lb. On the east coast, prices dropped a penny to a range of 16-19 cents/lb.
The softening in the R-PET market had been somewhat anticipated. In previous weeks, sources on both coasts had indicated that material was not moving. Indications were that China’s Green Fence policy – which restricts the amount of US R-PET material is shipped into that country – was creating a backlog of material in the US.
On the west coast, sources had indicated in recent weeks that R-PET bottle bales were not selling above 30 cents/lb. That sentiment was reaffirmed this week.
On the east coast, prices have also softened. Sources indicate that prices have dropped a penny.
The east coast is not as affected by Green Fence as the west coast, as most export material to China is produced from the west coast. Still, the backlog of R-PET material has created excess supply for west coast producers as well.
One west coast R-PET producer said he expects smaller producers to eventually go out of business.
“Green Fence is hurting absolutely everybody,” the source said. “There’s certainly some material we can’t move any more. I think a lot of people thought they could weather the (Green Fence) storm and wait this out, but I haven’t seen it. It seems like a lot of material is just sitting in warehouses.”
Sources on the east coast said the softening in that region will likely continue for the rest of the year. One east coast producer said R-PET prices may remain stagnant until next spring, when buyers start building inventory in advance of the summer beverage season.
($1 = €0.74)
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