Bottle bale markets in US, Europe see out of season appetite

Post-consumer bottle bale prices in the US and Europe have seen a climb in prices in recent weeks despite a normal seasonal reduction.

European sees bale price uptick

Bale prices plummeted in the winter last year, due to the high premium of recycled material over virgin PET and increased energy costs because of the war in Ukraine, as well as a normal season downturn in consumption of bottle bales as end-consumer appetite for bottles slowed.

During the summer of 2023, bale prices remained low, as consumers were reluctant to renter the market for material due to the poor end-consumer demand as macroeconomic prospects remained gloomy, as well as the maintenance of the higher recycled PET price over virgin PET.

Recent activity in the Northwest European recycled PET spot market has been attributed to a number of factors, namely the heightened cost of virgin PET material increasing the appeal of using recycled PET clear flakes, as well as recycling goals set out by brands that need to be met ahead of the end of the year.

Besides Northwest Europe, market participants have highlighted the bullish bale markets in Italy and Eastern Europe, where consumption of recycled material has also increased after a lackluster summer season.

US bales face import pressures

Last year, alongside the expected seasonal downturn, US domestic demand for bales faced challenges from competition with imported recycled PET flake and low prices of virgin resin. On the West Coast, export demand was supporting California bale prices, with shipments heard primarily to Germany and Turkey.

Throughout the summer of 2023, bale prices remained low as sellers reported seasonal generation below expectations, mainly due to reduced consumer consumption levels over the summer.

In the most recent market dynamics, the West Coast recycled PET spot market has encountered a significant shift with minimal demand in the flake market. Attractive import prices, mostly from Southeast Asia, have made it challenging for producers to compete, leading buyers to prefer cost-effective imports and low-price virgin resin, resulting in reduced flake sales as sellers operate on narrow profit margins.