While PET prices for the first half of 2013 have been relatively flat, HDPE prices have seen significant drops, particularly in mixed colors.
RPET PRICES STABLE
At midyear, RPET pellet prices were unchanged from the first quarter, while flake prices were up slightly in some markets. PET prices look fairly stable and that is good news for processors, though this is unusual for the time of year when beverage container sales should be at their highest. Early June RPET prices were actually the lowest of the year so far.
Why is the market so slow in summer? Among several reasons offered by industry source, number one is the sluggish economy. One recycler offered a personal example: “I have a friend who is a gas station owner. He says that when people used to stop at the station, they would often run in to get a bottle of water or snack. But because many people have less disposable income today, they often just pay at the pump and leave without ever going into the convenience store.”
Other reasons affecting recycled PET demand include lighter-weight packaging and the weather. It was wet and cold through June in the Northeast. March, in fact, was the coldest on record.
On the West Coast, the Chinese market is a bit quiet, but that is expected to change in the second half of the year.
HDPE: NATURAL IS UP, MIXED-COLOR DOWN
Natural commodity R-HDPE has been hot all year. In fact, prices just went up in late June. Scrap bale bottle prices are high and are fairly stable business. Not so for the mixed-color market.
“The first quarter was strong for mixed-color HDPE, but the second quarter was horrible,” says one source. “March was cold and there has been nothing but rain since then. Even as we speak, the Missouri river is flooding. The farm belt has been inundated with rain. That has cut into pipe production and sales and has even cut into the feedstock for pipe.” With weak demand, R-HDPE pricing is down.
Another recycle seller said HDPE pipe maker Advanced Drainage Systems has caused a huge stir in the market. Since opening its own HDPE reprocessing plant in Iowa 18 months ago, it has not only reduced demand for other reprocessors but has become a competitor in the bale market as well. “That raised the bale price and lowered the demand. Then in March, they got their second plant up and running. So that has really created a bloodbath for mixed-color. We have the largest delta we have ever seen to date between mixed-color and natural bale prices and natural—about 18¢/lb and closing in on 20¢.”
|Pellets, ¢/lb||Flake, ¢/lb|
PET Bottles (Clean)