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Asia and Eastern Europe

In Asia, challenges are being posed to the rPET sector by high feedstock costs, influenced by the competitive pricing of virgin PET and disruption to logistics. In Eastern Europe, meanwhile, the upward trend in rPET prices has continued into 2024, supported by upcoming minimum recycled content legislation.

In South East Asia’s recycling sector, the cost of baled PET bottles remains high owing to the attractive pricing of virgin PET from China, leading bottle producers to choose it over the more expensive rPET. This preference, driven by cost savings and the absence of strict minimum recycled content mandates, has reduced the demand for food-grade rPET. Consequently, recyclers can offer less for bales, diminishing the incentive to collect and creating a scarcity that drives up bale prices, thus complicating the economics for recycled materials.

Ongoing geopolitical tensions have increased freight costs and prompted buyers to seek lower prices for Asian rPET cargoes. Despite these pressures, recyclers are constrained by their own rising feedstock and production costs. Shipping costs on key trade lanes from Asia to Northern Europe surged from US$ 1300 per 40-foot container in October last year to US$ 5000 in early February.

In general, Asia’s recyclers have been unable to pass on higher production costs to downstream markets owing to the prolonged demand slump amid an oversupply.

The EU Single-Use Plastics Directive, with its 25% rPET content requirement, highlights the effectiveness of legal mandates in shifting market preferences towards recycled materials. Without similar mandates in Asia, preferences will tend to lean towards cost-effective virgin PET. Emulating the European model, there is a critical need for regulatory frameworks in Asia to mandate the use of rPET, driving demand and aligning with environmental sustainability goals.

Meanwhile, investing in technology and operational efficiencies can mitigate the impact of high feedstock costs and position rPET as a competitive alternative to virgin PET.