European recycled PET premium over virgin hits all-time high

The premium for recycled polyethylene terephthalate clear flakes over virgin PET in Northwest Europe reached a record high on June 30, as prices for the materials continued to follow diverging paths, S&P Global Platts data showed.

The RPET clear flakes premium over virgin PET was calculated at Eur210/mt June 30, the widest level since the PET clear flake assessment was launched in February 2008. The previous all-time high was Eur160/mt on May 15, 2020.

Virgin PET prices in Northwest Europe were last assessed at Eur1,190/mt June 30, down Eur35/mt week on week, the lowest level in 16 weeks.

Pressure on virgin PET prices is coming from both supply and demand sides, with weak buying interest unable to consume improving availability. Stocks of PET were heard higher than at the start in June, according to sources.

Despite improving weather in parts of Europe and delays to some imports from China, demand remains well below the levels seen in normal years in the summer.

"It seems that we will not have the usual summer season or at least it will be delayed," a producer said June 29.

Conversely, demand for R-PET clear flakes continues to strengthen, despite reports that some buyers are looking to switch some purchasing volumes away from R-PET into the virgin market.

Reports from both buyers and sellers suggest there will not be enough volumes in July to supply all demand, despite plants running as close to 100% as practicably possible.

R-PET clear flakes rose Eur100/mt on the day to close at Eur1,400/mt FD NWE.

While some sources expect R-PET availability to improve by the end of summer, due to more availability of virgin PET and more bottles being placed on the market over the rest of the summer, recyclers still face severe limitations in sourcing post-consumer PET bottle bales to feed their plants.

Post-consumer PET bottle bale prices hit Eur750/mt FD NWE, an all-time high, on the back of these tight supply fundamentals.