INSIGHT: 2022 to be a pivotal year for US R-PET market

Author: Emily Friedman


HOUSTON (ICIS)--US recycled polyethylene terephthalate (R-PET) markets will continue to face strong demand and tight supply throughout 2022 due to sustainability commitments and limited collection.

Fast-moving consumer goods (FMCG) companies have committed to incorporating post-consumer recycled (PCR) content into their packaging over the next five to 10 years, with that increasing demand coming at a point of low beverage bottle inventory due to reduced travel during the COVID-19 pandemic.

This points to intensifying strain on supply chains, while rising prices and tight supply of domestic virgin polyethylene terephthalate (PET) has put upwards pressure on the R-PET market.


On the East Coast, curbside bale prices are on the rise, as demand increases from large East Coast recyclers with expanded production capacities from 2021.

Last summer, DAK acquired CarbonLite’s 40,800 tonne/year pellet plant in Reading, Pennsylvania. Indorama purchased and expanded Custom Polymers’ 46,420 tonne/year Athens, Alabama facility.

PCB bale supply has remained tight in the West Coast as packaging manufacturers gear up for the summer season.

Post-consumer bottle bale supply remains tight throughout the winter months. Historically, on-the-go bottle consumption declines as temperatures cool, resulting in lower collection. Extreme winter weather can challenge municipal collection in some regions of the country.

Traditionally, recyclers may have had surplus summer stock, but high demand and COVID-19 restrictions throughout 2021 made building inventory difficult.

Some supply relief is expected soon, as rising temperatures encourage travel and on-the-go bottle consumption. Despite the boost, demand is likely to outstrip systemically short supply through the summer.

Several market participants have adopted the mentality to purchase any bale supply available, on the premise that the market will further tighten in coming months.

US PET bottle recycling rates dropped to 26.6% in 2020, down from 27.9% in 2019 according to the National Association for PET Container Resources (NAPCOR) 2020 PET Recycling Report. Additional infrastructure support is needed to boost domestic recycling.

As a product of this environment, West Coast deposit bale prices have now doubled from 2021 levels, reaching record highs in February.

With increased prices has come lower yields. Curbside bottle bale quality has degraded throughout 2021, with useable bottle feedstock yields as low as 50%. Historically, curbside bottle bale yields hovered around 60%.

In order to boost supply and regulate quality, many brand companies are becoming more involved with the waste and recycling process.

Several have backwards integrated or formed joint ventures with material recovery facilities (MRFs) to secure feedstocks amid rising concern that the US bale shortages will significantly worsen over the next one to two years.

Domestic collection is not expected to increase significantly without funding or legislative action such as extended producer responsibility (EPR) bills or improvements to the US deposit return scheme (DRS) landscape.


Recent spikes in post-consumer colourless R-PET flake pricing have brought East and West Coast flake along with virgin PET resin nearly at parity. For potential buyers, late entry into the US R-PET market may be difficult due to the high cost of material and tight supply in this highly networked industry.

Food-grade R-PET pellet prices remain elevated above virgin resin, having increased 52% from this time last year. Previously, R-PET was often used as a cost-effective substitute for virgin PET material. Now, R-PET commands a premium due to sustainability targets of many beverage brands and packaging companies.

As the R-PET market continues to strengthen, R-PET prices may decouple from virgin in 2022 as they already have in Europe and Asia. In many cases, end-user customers still expect recycled prices to be similar if not lower than virgin PET despite the fact the R-PET market lacks the sorting and collection capacity to meet current demand.

Depending on the supply environment of 2022, the R-PET market could significantly shift as consumer brand companies increase PCR content levels in their packaging. In 2020, 38% of R-PET material was used in the fibre market, down from 47% in 2018, according to statistics from NAPCOR. This shift is due to the premium that packaging grade or food grade R-PET commands, as well as the demand stability expected over the next several years.

To balance the high demand and rising prices, Asian and Latin American R-PET flake imports have been considered but deals are deterred by high ocean freight costs and logistics challenges.

Higher ocean and inland freight and drayage costs are impacting margins and R-PET prices for several producers and importers.

Port congestion on the West Coast is seen to be improving, while backlogs are growing at ports on the Atlantic Coast and in the US Gulf.

In order to avoid significant delays on the West Coast, shipping companies are now sending vessels to East Coast ports, such as Charleston, South Carolina.

International conflict is further straining the global logistics situation. Shipping companies Maersk and MSC advised customers that they will cease calling on Ukraine ports and stop accepting orders from the eastern European country “until further notice”.

Domestically, cross-country sales may increase if shipping equipment and labour shortages improve.

As the flake and pellet market continues to tighten, producers are exploring expansions for additional capacity.

Some recyclers have expressed hesitancy to expand operations on the concern that collection, and thus supply, will not be able to keep up with demand. Others are encouraged by the strong demand outlook.

Several recyclers and converters are planning on facility expansions or upgrades in 2022 and beyond. At some locations, capacity is expected to double in 2022.


All industry participants, from Material Recovery Facilities (MRFs) to big consumer brand companies are looking for unified legislation to increase recycled plastic supply.

States like Washington, California, Maine, New Jersey and Oregon are paving the way in plastics and recycling legislation.

At the federal level, the Break Free from Plastic Pollution Act was revitalised in March 2021 and if passed, could entail a nationwide EPR programme, a national DRS programme, minimum recycled content standards, and restrictions on plastic waste exports.

With new legislation or brand commitments comes many questions, surrounding PCR content calculations and certification, scope of packaging products included, and justified supply chain concerns. These questions highlight complex nature of defining and enforcing these types of regulations, which are necessary for a circular economy.

2022 should become a critical year for the recycling industry, the outcomes of which could potentially shape the sector’s long-term structure.

ICIS launched a US R-PET commodity service on 23 February 2022, covering deposit and curbside post-consumer bales for both East Coast and West Coast, bottle-derived and post-industrial hot-washed flakes, and food-grade pellets. To subscribe to the new report, or for further information, please contact

ICIS is currently prototyping a US R-PE price report, covering post-consumer HDPE bales for both East Coast and West Coast, bottle-derived and post-industrial hot-washed R-HDPE flakes, and R-HDPE and R-LDPE pellets. To find out more about the new report, or to receive a free copy of the prototype, please contact Emily Friedman at