Recycled PET Prices Stable or Soft— Depending on Geography

More stable on the East Coast, sharply lower on the West in the first quarter.

R-PET prices in the first quarter of this year have been fairly stable on the East Coast or even slightly lower. But the West Coast has seen a more dramatic drop. While prices for clear post-consumer pellets on the East Coast can still be as high as 48¢/lb (though 42¢ is more typical), they can be as low as 38¢/lb on the West Coast. Prices usually start to rise in March, but nothing had happened by early April on either coast.

“We have to fight for survival by learning to live on smaller margins if we can find them,” says one East Coast recycler. “While in 2008, factors were clearer and fewer, today there are many more factors contributing to overall pricing. Now there is an overabundance of virgin in the market place, low oil prices, and low petrochemical prices, so it is difficult for recycled resin supplier to compete.”

Low virgin prices makes recycled resin look less exciting if you can’t make economical sense out of it, analysts say. “My old mentor used to say, ‘The bloom is off the rose.’ When you are looking at a package design today, I think recycling is a requirement way down on your list,” notes one analyst. “There are still some vibrant programs [to use PCR] out there that are that are championed by some of the majors, but at the end of the day, it comes down to money.”

The PET market is flooded internationally. “Some virgin manufacturers who have to compete globally still continue to produce more despite the glut,” notes one recycler. “Companies are taking longer to pay us as well.”

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