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Report for Asia and Eastern Europe

After a sluggish April in Indonesia and Malaysia owing to Ramadan, which typically affects both supply and demand, the May outlook is more upbeat on renewed demand and a drive-up in prices supported by the low availability of bottle feedstock. In Thailand, where the market was unaffected by Ramadan, trade has continued to be supported by the recent approval from the authorities for use of food-grade rPET in domestic bottles.

Access to sufficient volumes of high-quality PET bottle feedstock remains a challenge for food-grade rPET recyclers across the region who are generally running at only a fraction of their installed capacities.

Food-grade rPET prices attract the highest premiums in Europe but there is a requirement for European Food Safety Authority (EFSA) approval. Many Asian recyclers have had an eye to securing such approval, which is challenging but not impossible with a proper end-to-end traceability system in place. At the time of writing, at least three players in Vietnam, Thailand and Malaysia have secured the EFSA seal of approval, enabling them to attract premiums from overseas worth hundreds of dollars.

Large volumes of flake are heading to Poland and other Eastern European countries as well as to Western Europe, thereby putting pressure on free delivered North-West Europe rPET prices.

Last year, Vietnam became the first South East Asian country to implement an extended producer responsibility (EPR) scheme, holding companies responsible for the end-of-life phase of their packaging. Such a scheme will support stakeholders along the recycling chain through subsidies from major fast-moving consumer goods companies for each tonne collected and recycled. Other countries in the region also have an EPR framework in place, such as Indonesia since 2019. The Philippines is also making rapid progress and is largely copying the Vietnamese system.

Freight rates from Asia to Europe and the USA have returned to pre-COVID levels, thereby supporting exports of recycled pellets to Western companies lacking the quality material to meet their minimum recycled content requirements and commitments.