Petrotahlil - The direction of virgin polyethylene terephthalate (PET) prices and the availability of post-consumer material, together with ever-increasing demand from brands and fast moving consumer goods (FMCGs) for certain grades of recycled material, are all impacting recycled PET (R-PET) sentiment into the new year, according to market sources.
Many R-PET buyers and sellers are watching the virgin PET market and upstream feedstocks paraxylene (PX) and monoethylene glycol (MEG) in an attempt to understand where R-PET prices may go in the first quarter.
A recent escalation in tensions between the US and Iran has been mentioned as a potential stumbling block amongst R-PET participants, but concerns about a worsening of the situation and its implications for R-PET are limited.
R-PET is only expected to be affected if crude oil spikes - and if this filters down through the value chain. Any significant increase in virgin PET prices could prompt R-PET flake buyers who had chosen to buy lower-priced virgin PET over R-PET to return to buying recycled material - which could tighten availability.
“My feeling is [prices going forward] will be dependent on virgin [PET],” a buyer said, adding that it had already seen an increase in demand compared to 2019 due to brand pledges.
“Especially in northern Europe, and Germany especially, as the quality is better,” the buyer explained, indicating where it thought that demand is currently strongest.
The increase in buying activity was reiterated by another trader who said that the market had become far more active at the end of last week.
“[It] seems many gamblers postponed buying in December and many producers stopped for maintenance in December and January,” the trader said.
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