Re-PET prices likely to keep up after the holiday with tight supply

Recently, we have noticed that the overall supply of recycled PET during this winter season is much tighter than previous years. Whether it is bottle bales recycled by cleaning plants or PET flakes purchased by downstream recycled chemical fiber plants, the overall supply is very limited.

From the perspective of seasonal factors, the lower winter temperatures contribute to a decrease in overall consumption of soft drinks and water, which are considered off-season. Additionally, the recycling of rPET relies heavily on community recycling sites and personnel. In cold environments, recycling sites are closed and the number of recyclers decreases, which restricts the recycling network and reduces the recycling volumes.

The above mentioned factors are the conventional seasonal influences that occur every winter. However, why is the rPET supply so tight this year? The following points are summarized:

1. Changes in consumer habits: It is understood that many people have decreased their consumption of mineral water and soft drinks in recent years, which negatively impacts the quantity of recyclable bottles.

2. Increased scale and intensification of cleaning plants: Large-scale cleaning plants make significant purchases, including cross-regional and cross-province/city transactions. The competition among these large-scale plants has driven up prices, resulting in a more stringent market supply.

3. Increased downstream demand: The re-PFY and re-PSF capacities continue to expand and production is also increasing. Although the growth in demand for sheet materials has slowed down, the overall quantity is still considerable.

4. In recent years, the overall social inventory of PET flakes and bottle bales has been decreasing. Especially in July and August 2023, the price of PET flakes experienced an unexpected upward trend during the summer, indicating a shortage of supply.

Currently, many recycling stations, cleaning plants, and fiber factories have suspended operation. Market transactions are also limited, and some factories have made some pre-holiday replenishment. However, the actual quantity is expected to be very limited. Factories that have products in stock are also reluctant to continue selling unless they are facing financial constraints. After the holiday, recycled chemical fiber factories are likely to face a tight supply of raw materials and will need to purchase sufficient materials to resume production, which will provide visible support to the price of PET flakes.