Asia and Eastern Europe

The anticipated rPET demand uptrend towards the year-end holidays has not materialized. September showed no significant increase in demand and this trend is likely to continue for the remainder of the year. Challenging macro-economic conditions, especially the persistent weakness of the US dollar, have further hindered buying interest for Asian exports. India’s rPET prices have seen fresh drops to present tough competition for South East Asian cargoes, particularly as Indian bottle-grade flakes are trading significantly lower than those from South East Asia. This has made it difficult for South East Asian producers to stimulate interest from pelletizers and converters, both locally and in deep-sea markets such as Europe and North America.

South East Asia continues to face tight feedstock availability owing to both seasonal monsoon disruption and high production costs. The wide price gap between virgin and rPET as a result of insufficient feedstock has led brand owners to limit their sustainability requirements, as there are no legal obligations driving demand. South East Asian producers are struggling to remain competitive, with Indian producers securing more favourable spot and term negotiations with European and North American buyers.

Although shipping costs from South East Asia to Europe and the US Gulf have stabilized, the impact has not been sufficient to stimulate trade. While no longer on the rise, freight rates remain high and continue to weigh on the competitiveness of South East Asian exports. Benefitting from both lower production and freight costs, Indian exports continue to outperform South East Asian cargoes in global markets.

Meanwhile, Eastern Europe’s rPET market has been slow to rebound after the summer holiday period, with only a gradual recovery apparent by mid-September. Bale supply is increasing as post-summer peak bottle consumption feeds into the recycling chain. However, regional variations persist owing to inconsistent temperatures across Europe, leading to fluctuating availability in different areas. Prices for rPET have remained broadly stable across Europe, although there have been some reports of distress, non-repeatable prices within the chain.

Substitution back to virgin PET is becoming increasingly common, driven by the comparatively lower prices for virgin material. However, there are signs of increased buying interest from the bottle-to-bottle sector in anticipation of the 25% recycled content mandate under the EU’s Single-Use Plastic Directive coming into effect from January 2025. Views on the impact of this regulation remain divided, with uncertainty lingering over the penalties for non-compliance.