- Midwest bales see largest daily price gains
- Market grapples with tight recycled, virgin PET supplies
The US recycled polyethylene terephthalate market continued its upward price trend as feedstocks in both California and the Midwest gained strength on the day Feb. 24.
In California, prices for both premium- and curbside-grade post-consumer bottle bales gained 50 points on the day to be assessed at 17.75 cents/lb and 9.75 cents/lb, respectively, amid pricing indications received at 18 cents/lb and market talk of higher pricing for both grades.
Prices for premium-grade California feedstock have risen nearly 20% since the start of 2021 and 109% since hitting a Platts low of 8.50 cents/lb in August 2020.
The recent strength seen in the California R-PET market has been attributed to a tight-supply/high-demand situation in the state as volume generation continues to be limited while demand from domestic reclaimers remains high. According to sources, buy activity from Mexico, which has been supporting higher prices since Q3 2020, continues to absorb US material. Feedstock prices in the country were heard talked as high as 25-30 cents/lb.
According to one source, "generation is so low that many recycling plants didn't make the amount they should have," causing buyers to cancel orders.
Additionally, the recent supply tightness in the virgin PET market has been exacerbated by the deep freeze that hit much of the US the week of Feb. 15, which caused many feedstock facilities to either temporarily suspend operations or declare force majeure. When virgin PET supplies are tight, manufacturers who have the capabilities often switch to using recycled material or a blend of both.
In the Midwest, feedstock bales finally broke their month-long price streak of 9 cents/lb after gaining 1.50 cents on the day to be assessed at 10.50 cents/lb amid pricing indications received at level and market talk of value at 11-12 cents/lb.
According to sources, supply disruptions on the back of severe winter weather seen in the region in recent weeks are finally starting to catch up to prices, though some anticipate much higher surges in the coming weeks.