The problem is soft demand in the West and reduced supplies in the East.

East and West Coast scenarios for RPET pricing are very different. The price spreads shown in the accompanying table reflect the higher prices in the East vs. the lower tabs in the West.

On the West Coast, bale prices are softening. The cost incentive to buy recycled material has returned, but nobody believes it will last, says one reclaimer. Another added that while the cost differential (virgin/recycle) used to be 7.5¢/lb, it is now only 2¢.

The market is softer on the West Coast because the Chinese are not buying as much as they once did. That leaves more feedstock up for grabs. At the same time, bale prices on the East Coast are higher than they should be because of a supply shortfall. The bad winter hurt beverage sales, which impacted feedstock availability. “Not only are people not in the mood to drink cold beverages, but they can’t get out of their houses to return bottles. It’s a double whammy!” one recycler lamented. “I’ve been visiting suppliers and letting them know we are looking for materials.”

The opposite is true on the West Coast where there is a drought. “People are buying bottles like its summer,” a source there said.

Prices have gone up slightly on the East Coast. “We are getting squeezed because the virgin PET supply/demand balance is loose. People are not going to buy recycle because prices are too high,” one recycler said.