News Code : 45795

Petrotahlil — Spot prices of virgin polyethylene terephthalate in Northwest Europe on Jan. 6 overtook prices of recycled PET clear flakes for the first time since May 15, 2019, Platts data showed.

A sharp increase in PET prices in the first full week of January was driven by PET supply tightness in Europe, stemming from shortages of raw materials and high freight rates from Asia.

Platts PET FD NWE was assessed at Eur790/mt on Jan. 6, up Eur50/mt from Dec. 23 and at a Eur20/mt premium over Platts Recycled PET clear flake FD NWE assessment.

Meanwhile, R-PET clear flakes were assessed stable on the day and from Dec. 23 at Eur770/mt FD NWE, with demand yet to return to the market and amid reports of ample supply available.

European PET recyclers largely shut down for longer than usual over the Christmas break in a bid to rebalance supply.

Although virgin PET producers were also heard running at low capacity in the first week of January, a European PET producer told Platts that this was due to delays with raw material arrivals as a result of a build-up of ships at European ports causing delays to unloading times.

"There is a supply shortage and a logistic situation, with freight from Asia that adds fuel to the fire," a source said Jan. 6.

The virgin PET to R-PET clear flake differential was a hot topic in the market in the first week of January. Some recyclers maintained there was still a premium for recycled material, despite the spike in virgin resin prices.

Others expressed the bullish sentiment that an increase in virgin resin prices would afford recyclers the ability to increase R-PET prices and relieve margins that have been narrowing throughout 2020.

However, R-PET clear flake buying ideas did not increase in early January from December, heard at Eur700-750/mt FD NWE.

One recycler said: "We are seeing virgin prices rising above R-PET momentarily, but when R-PET demand returns, we may see it price at a premium again."

Overall PET demand remains low for recycled and virgin material, though sources suggested this was due to market participants slowly returning to the market.

"They will probably need 10-14 days to understand the reality," the producer said. "The real demand is likely to start in the second part of next week."

Platts Container Rate 1 North Asia-North Continent was assessed at $8,500/FEU on Jan. 6, up $1,700/FEU from Dec. 23, and up more than fourfold from Nov. 30.

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