UK consumer stockpiling lifts R-PET demand

London — UK recycled polyethylene terephthalate plants remain at high production capacity as order books for the food and beverage packaging markets remain robust.

As consumers stock up on supermarket essentials, including packaged food and bottled water, converters are calling on suppliers of R-PET clear flakes and food-grade pellets for additional volumes.

"We've had more calls on material over the weekend than all of February," one supplier said.

A recycler said bottled water was "flying off the shelves. We're not seeing any downturn in demand."

A consumer said they were increasing stock levels from the usual three days of supply to seven days, but were nearing warehouse capacity.

It is also clear that UK converters are searching for more local supply, fearing disruption to logistics for material coming in from the continent.

Despite these concerns, some UK converters were continuing to seek material for April delivery from Northwest Europe, saying a lack of UK supply meant they had little choice.

Even within the UK, truck driver availability is a concern. One buyer was requiring truck drivers to sign declarations and wear personal protective equipment when entering production sites, according to a seller.

Logistical challenges have caused a pricing disconnect between UK sourced material and Northwest European material. Last Wednesday, UK clear flakes were assessed stable at GBP830/mt FD UK, while Northwest European spot fell Eur45/mt to Eur900/mt FD NWE as buyers in the continent expressed uncertainty over border closures.

The latest indications heard from the UK market suggest some suppliers have been increasing offer levels as a result of calls on additional volumes from the UK. Offer levels on Wednesday have been heard in an GBP850-875/mt FD UK range for R-PET clear flakes. Bid levels were still seen in the low-GBP800s/mt FD UK on Wednesday.