- Mixed colored flakes under further pressure
- Further coronavirus restrictions not expected to boost demand
European recycled polyethylene terephthalate demand was steady in the week ended Oct. 21, despite a narrower premium over virgin resin since the start of the month.
This narrower premium in Northwest Europe, standing at Eur10/mt on Oct. 21, compared with Eur25/mt on Oct. 1 and compared with an all-time high of Eur160/mt on May 18, has not spurred consumers to increase R-PET demand, according to sources. "The R-PET premium is narrowing, but we are still purchasing more virgin than recycled," one source said, adding, "probably others are going in that direction too."
This was confirmed by a recycler, who said "R-PET demand is not being influenced by the narrower margin to virgin. Converters have already changed their ratios to favor virgin and do not want to change back. Production is smoother now there is more virgin in the mix."
Mixed colored flakes were under even more pressure than clear flakes, although prices remained stable this week. The bottom range of indications hit Eur600/mt FD NWE this week, as sellers saw dwindling demand from packaging and strapping.
Amid further coronavirus-related restrictions being implemented and expected across Europe, sellers reported that retailers had sufficient stocks and were far better prepared for any increase in consumer purchasing than in the spring.
In the post-consumer bales market, spot prices were stable this week, bucking the trend of rising prices observed so far during the autumn. Expectations pointed to further tightening supply, in perhaps 2-3 weeks, according to some. But, for now, supply availability was acceptable, particularly considering production rates had fallen in general across Northwest Europe. One recycler noted that they believed production rates to be in the 70%-80% range.