European PET market turmoil could see knock-on effects for brand owners

The European PET market is currently in a state of turmoil, which has principally been caused by a lack of PTA feedstock and reduced imports.

Major PTA producers in Europe have recently run into a range of technical issues, resulting in two PTA producers declaring force majeure and therefore restricting PET production. This comes at a time when inventories have been low and the beginning of the peak season has seen imports down from Asia – a region where local demand has been strong.

This is frustrating local producers who are struggling to fulfil orders at a time when prices are rocketing for spot material. Early May saw offers of €1200/t, while for June that figure is coming in at closer to €1450/t. There is a real possibility that a collection of brand owners will not be able to put all they want on shelves in the near future.

This could see the localised restriction of some products and ‘own product’ brands may become restricted. Additionally, products with modest sales may be unavailable for a short time, which will have a knock-on effect for consumers.

Such tightness in the PET market has not been seen for many years and whilst it may prompt some idled plants to re-start, the real prospect is that some spot product could be seen in excess of €2000/t in Q3 – something that would have been unheard of 6 weeks ago.

Helen McGeough – RPET Services

Author: Helen McGeough – RPET Services

Helen was a Business Studies graduate from Nottingham Trent University and has worked in consultancy for nineteen years including earlier experience in the IT industry. She joined The PCI Group in 2004, supporting the client base with market analysis and custom research for both virgin and recycled PET markets. Helen now leads the activity to support to the RPET chain worldwide with a wide network of contacts including collection agencies, all major reclaimers, technology suppliers, machine manufacturers, industry associations, government bodies and major brand owners. Helen’s key role is to lead research and analysis for all aspects of PET recycling, its place in the increasingly important agenda for sustainability of the entire supply chain and its fusion with the growing global focus on the Circular Economy. In line with this, Helen is developing research and insight into the recycling of other polymers and materials used in packaging. Contact: helen.mcgeough@woodmac.com Tel: +44 01892 864 382