PRC ’25: US R-PET demand to fall short of 2025 expectations, but still see slow growth

HOUSTON (ICIS)–As the landmark year, 2025, swiftly passes, many within the US recycled polyethylene terephthalate (R-PET) industry doubt the demand and market growth promised by voluntary brand goals and regulatory post-consumer recycled (PCR) content minimums will come to fruition.

Despite this reality, the market has and will continue to see slow progress, with forecast growth even in the face of trade and macroeconomic uncertainties heading into this year’s Plastics Recycling Conference (PRC).

MARKET SNAPSHOT
Over the course of 2024, average US R-PET market prices saw increases across the board ranging from 2 cents/lb to over 6 cents/lb.

More muted growth is expected throughout 2025.

At present, East Coast bale, flake and pellet prices remain steady, on sufficient supply and unchanged demand trends despite March typically being a period of transition for the market.

On the West Coast, bale prices remain under pressure from Mexican export interest, though domestic players are muted. Flake and pellet prices have shifted in line with bales, but remain under pressure from competitive recycled and virgin imports.

Demand expectations across the US for the full spring season are mixed.

Historically, demand from thermoformers who cater towards agricultural markets increases in the spring and summer alongside growing season.

At the same time, demand from the beverage industry also tends to increase in the spring in preparation for summer bottled beverage consumption.

Though, this year, ramp-up timing and intensity remains uncertain due to the impacts of tariffs and inflation on consumer spending.

On the fiber side, demand is expected to remain weak and is typically not as seasonally driven.

BRAND DEMAND AND SUPPLY LANDSCAPE
When assessing PCR demand, there are two factors of influence: firstly, the overall product demand as referenced above, but then secondly, the transition from virgin packaging materials to recycled content.

Hinging on the same macroeconomic uncertainty, late last year and early this year several brands have publicly stated it is likely they will miss their 2025 sustainability goals.

Under this mentality, PCR sellers have noted that many brand and converter customers have downsized PCR growth plans throughout this year as a cost-savings mechanism.

This comes as the most recent fast-moving consumer goods (FMCG) data suggests slowing progress, or even in the case of the 2023 Canadian Plastics Pact annual report, negative progress.

According to the latest Ellen MacArthur Foundation Global Commitment report, nearly 1.6 million tonnes of additional recycled plastic would be needed for signatories to meet their 2025 targets, as compared to 2023 PCR volumes.

On top of the overarching trend, much of the market presently remains in wait-and-see mode due to the whiplash effect of proposed US tariffs, though few players are heard to be operating strongly with consistent year-round demand.

The fragmentation of the market persists, as was highlighted during off-peak season last year, and underscores the evolving landscape of polyethylene terephthalate (PET) recycling infrastructure.

While some large players who have become entrenched as a premier provider of R-PET see strong order books, other standalone players continue to struggle.

Adding to the mixed messaging, several players expect expanded capacity in 2025 such as Republic Services, D6 and Circularix, while another player, Evergreen, has announced a partial facility closure.

Future investments in R-PET, whether domestic or international, have largely been paralyzed by the risk that market sentiment and trade policies could shift with each administration, and investments take several years to come to fruition.

POLICY
While not a primary driver of US international trade, plastic scrap and recycled plastic do have strong exposure to international markets, particularly Canada and Mexico as waste is regional and typically market economics hinge on location proximity.

To be clear, the proposed 25% tariff on imported goods from Canada and Mexico does include recycled plastic and plastic scrap.

When looking at bale and flake supply, tariffs could push US recyclers who are close to Mexico and Canada away from international supply, and towards domestic volumes, thus further straining the limited collection system.

The US imported 133 million lbs of PET scrap in 2024, with Canada leading the globe as the US’s strongest PET scrap trade partner, followed by Thailand, Ecuador and Japan.

Moreover, several US converters and brands have partnered with Canadian and Mexican recyclers over the last several years and now may seek supply relationships with domestic recyclers to avoid additional tariff-related costs.

This could be seen as a positive force for the domestic recycling market, though players expect little further support from the current administration, as sustainability and environmental progress has not been identified as a key priority. No federal policies are expected.

Despite the ongoing negotiations of the Global Plastics Treaty, based on President Trump’s second withdrawal from the Paris Climate Accord, it is unlikely the US will support another global sustainability effort.

Instead, state-level legislation is expected to continue carrying PCR momentum, with several proposed extended producer responsibility (EPR) bills as well as some PCR mandates active within various state legislatures.

Moreover, as existing policies continue to take shape, such as defining the regulations of California’s Senate Bill 54, or the implementation of Oregon’s EPR program starting this July, the industry hopes that regulation provides a stronger foundation for recycled plastic market growth over voluntary goals which shift with economic sentiment.

Hosted by Resource Recycling Inc, the PRC takes place on 24-26 March in National Harbor, Maryland.

ICIS will be presenting “Shaping the Future of Recycled Plastics: Trends and Forecasts” on Monday, 24 March at 11:15 local time in room Potomac D. As well as attending our session, we would love to connect with you at the show – please stop by our booth, #308.

Visit the Recycled Plastics topic page

Visit the US tariffs, policy – impact on chemicals and energy topic page

Visit the Macroeconomics: Impact on chemicals topic page

Visit the Logistics: Impact on chemicals and energy topic page

Focus article by Emily Friedman