Petrotahlil --Millions of polyethylene terephthalate (PET) bottle sales are lost as mass gatherings across Europe are cancelled, flights are grounded, and tourism is displaced, but as society flickers back to life the industry holds onto a glimmer of hope.
“It is true that summer events are cancelled and international tourism is not expected to come back; Europeans will, however, stay home and after lockdown period want to ‘celebrate’ life,” a producer said.
Despite the recommendation from the European Commission - the EU's executive body - for member states within the visa-free Schengen area to lift border restrictions by 15 June, the Staycation may remain a priority over international holidays this summer.
Summer being the traditional time of year when PET sales tend to peak.
The lockdowns boosted the appetite for local material, in particular products encased in large bottles.
PET imports were no longer a highlight, although recent exchange rate developments may be changing the outlook.
The food packaging sector also bucked the negative pandemic trend, and this is likely to continue to benefit the PET thermoforming industry.
Recycling is suffering due to low-cost virgin material, and this is causing serious problems for R-PET while buffering sales of PET.
Prices dropped but suppliers’ margins improved over the last few months, and most recently the value of PET has increased slightly as upstream costs firmed.
FAR FROM AVERAGE VOLUMES
“I feel that 80% of the market sits between 70-80% of normal volume, plus minus 10%,” a buyer said.
Amid the pockets of positivity, there continues to be huge concern and uncertainty over the second half of 2020.
The struggling economy and a potential second wave of the pandemic are high on the agenda and could easily damage PET demand further.
PET resins can be broadly classified into bottle, fibre or film grade, named according to the downstream applications. Bottle grade resin is the most commonly traded form of PET resin and it is used in bottle and container packaging through blow moulding and thermoforming.
Fibre grade resin goes into making polyester fibre, while film grade resin is used in electrical and flexible packaging applications. PET can be compounded with glass fibre for the production of engineering plastics.