LONDON (ICIS)--Players in the recycled polyethylene terephthalate (R-PET) are being very cautious in their views for July as many focus on the immediate issues of weak demand, high stock levels and low virgin PET prices.
June prices for both colourless (C) and mixed coloured (MC) post-consumer bottles (PCB) and flakes dropped on the back of weak demand largely caused by substitution back to very low priced virgin PET, as well as an overall lack of demand for R-PET in the European market.
Of the sources that were willing to comment, the sentiment appears to be remaining bearish, with several continuing to see only downward pressure on prices, as was the case in June.
“July is a mixed picture,” a flake seller said.
"[There is] still pressure on prices so [we] expect further decrease but don't know how much.”
LOW VIRGIN DENTS R-PET
The main problem for the R-PET market is a lack of buying interest as many converters have already moved back to using the lower-price virgin material where they are able to do so.
And, with weak demand for PET in general the last couple of months, there is just not much appetite in the market right now.
“The R-PET market is very quiet, people don't have demand, we are storing materials at our warehouse, we are offering, but customers don't want it at that moment,” an large R-PET seller said Tuesday.
Amongst the uncertainty, there are some glimmers of hope as lockdowns across Europe ease, allowing consumers to get out more and spend.
This has already caused a slight improvement in PET demand in the last couple of weeks.
“We see virgin pick up a little, and demand on flake and R-PET picking up, things look a bit better than a few weeks ago,” a large distributor said Monday.
Another area of concern for some is around supply.
With less consumer activity in recent months and uncertainty how this will develop over the summer, this will limit the amount of PET coming back into the recycling chain.
The flake seller highlighted that this is usually the time of year that people start building stocks for winter, but they are not able to as the material isn’t there.
Whether or not this lack of availability plays into price discussions for July waits to be seen; as it appears, the current lack of R-PET demand coupled with comfortable stock levels across the flake and food-grade pellet chain is not a major cause for concern for buyers right now.
Front page picture: PET pellets for
destined for R-PET production
Source: Patrick Pleul/EPA/Shutterstock
Focus article by Matt Tudball
Click here to see regulatory targets and a list of chemical and mechanical recyclers on the ICIS Circular Economy topic page.