Report for Asia and Eastern Europe

After over 12 months of continuous price increases, the party seems to be over for polymers. And the trend also applies to recycled resins, with the possible exception of rPET which continues to be supported by minimum recycled content mandates and brand owners’ commitments in Europe as well as in Asia.

The Thai government announced in June that packaging regulations would now allow the use of rPET in food-contact packaging. This paves the way for the industry to use rPET in bottles and other food-grade packaging, allowing brand owners to accelerate their recycled content commitments in the country. There is now such legislation in the three most populous countries in South East Asia, namely Indonesia, Vietnam and Thailand. 

Last year’s price rally and more legislation in favour of recycled content have led to massive investments in recycling capacity across the globe. However, we are reaching the point where recycling capacity exceeds the volumes of waste feedstock being collected.

PET bottles in Europe have notched up a 58% collection rate compared to 26% across South East Asia - the lowest rate in the world.

Collection is the real bottleneck for the recycling industry and the battle for feedstock (bales, flakes, etc) has only just started and can be expected to be tough. Given the many rPET food-grade plants popping up across South East Asia where capacity has tripled in the past 12 months, we can confidently forecast that most of these plants will be able to run at only a fraction of their installed capacity. Therefore, it becomes ever more urgent to invest in collection solutions rather than in additional recycling capacity. Companies with access to such highly sought-after feedstock will be the real masters of the game in the years to come.