The recycled PET market was red-hot in February and March with Chinese export demand picking up on the West Coast and new domestic recycling plants competing for that same material. Pricing has gone up about 20% in that period.
On the West Coast, clear PET bales were selling for about 25.5¢/lb in mid-March and that number is expected to keep going up through April. "Right now, the Chinese are controlling the market, but within a year that is expected to change with two new big recycling companies expected to come on line. Those plants alone could take 200 million lb off the market," said one West Coast recycler.
On the East Coast, one recycler said, "It's probably the highest demand that I have seen in the last decade right now. The Chinese market is as hot as it has have ever been and they've got more competition than they ever had with a lot of startup companies, both small and large, getting into the recycling business."
One analyst commented that the brand-new Clear Path Recycling plant in Fayetteville, N.C., can handle 160 million lb/yr of material in its first phase and a second phase planned for next year will up that total 280 million lb, making Clear Path the largest PET recycler in North America. But where is that material going to come from? "Everyone is going after that same chunk of pie, and nobody is doing much to increase collection," said another source. "What's happening is that rather than me selling reclaim product to a sheet manufacturer, the sheet manufacturer is putting in its own reclaiming equipment and is going after the same bales."
Several recyclers said they are being forced to prospect for material outside their usual home geographic area. "East Coasters are having to search farther west to find material, which means the Chinese will have to get more competitive and look east," said a West Coast supplier.
The expected result is more rapidly rising prices. Non-contract customers may see increases more than once a month, sources say.
RECYCLED PET PRICES IN MID-MARCH
|Pet Bottles , Clean||Pellets ¢/lb|
|Clear Post Customer||61-72||53-55|
|Green Post Customer||58-60||48-50|
Demand is not the only factor affecting pricing. Oil prices are on the rise too, which affects virgin pricing. But, at press time, it didn't seem that virgin prices were rising as fast as post-consumer prices. "There is likely to be a plateau where post-consumer materials may become non-competitive and companies with recycled-content initiatives will ultimately back up their promises or switch back to cheaper virgin product," one analyst predicted.
The accompanying table shows a broad range of prices because they can vary geographically. For example, on the East coast, clear pellets are selling 65-72¢/lb, but on the West Coast that number could be as low as 61-64¢/lb. There's less difference for clear flake (and there's not much green RPET on the West Coast). Sources indicate that clear flake could rise as high as 57¢/lb this month.