The global R-PET market is facing tight supply and strong demand in the second half of 2021

Tight supply, strong demand, and market uncertainty after the summer will determine the global R-PET market in the second half of 2021.

　　 When the Southeast Asian market reduced export opportunities due to high freight rates, the same global freight issues put pressure on the R-PET market in the United States and Europe. At least in Europe, the price of transparent film in the second quarter rose to a ten-year high.

In addition to immediate demand, the uncertainty of when many regions in Asia and Europe will return to normal after the epidemic has caused buyers to stop and think about how much demand for PET in summer is, which in turn will package and supply PET bottles in the fall. Make an impact.

　　 As buyers scramble to buy materials, the European market has increased volatility

　　 The European R-PET market will enter the second half of the year under unstable conditions. The tight supply of the entire value chain and unexpectedly strong demand pushed the R-PET transparent sheet market in Northwestern Europe to a ten-year high.

　　 In the second half of 2021, the current market dynamics may continue for a period of time; suppliers cannot supply the required quantity, while buyers demand delivery as soon as possible.

　　 It is the combination of these fundamental factors that has caused a period of volatility in the entire R-PET value chain, making it difficult for participants to even determine the quantity and price this month, and it is almost impossible to determine the price until the summer.

　　 A buyer said: "Before August, I couldn't even get a car of transparencies as a sample of the new production line."
　　 However, for many people in the market, the expectation of continuous volatility and the uncertainty of demand are slowly emerging, which means that the prospect of unfixed materials in the next few months is promising.

"Countries are still in various forms of lockdown... I am worried about whether the demand will be good this summer, I don't want to be trapped by expensive materials, so I didn't stock up, just meet my monthly needs." A packaging producer Shang said.

　　High freight rates inhibit export potential and boost domestic demand in Asia

　　 According to sources, continued tight supply and container shortages will lead to uncertain prospects for the R-PET market in the second half of 2021.

　　 Although the PET packaging supply situation in some countries such as China has improved, due to uncertain prospects, especially after the second outbreak of the epidemic in India and other countries, most Asian markets may still face continued supply shortages.

　　 Sources said that due to the rising demand from brand owners and the emergence of new R-PET food grade pellet projects in Southeast Asia in the second half of 2021 or early 2022, this situation will be particularly serious for transparent and high-quality packaging.

　　 At the same time, according to sources, the fundamentals of virgin PET and polyester are not clear, which may put price pressure on R-PET's price-sensitive applications (such as fibers).

　　 In addition, the shortage of containers and the expensive freight are still a challenge for Asian R-PET sellers, who want to export and get better prices in the West.

　　 The source pointed out that it may take several months to ease the global container tension. A source said that this situation may continue until the end of 2021.

　　In view of export difficulties, Southeast Asia (at least ASEAN and the Asia-Pacific region) has paid more attention to accelerating domestic demand.

A source in Southeast Asia said that if this is not done, Australia may become a better destination in the short term, because people have heard that Australian prices are as attractive as those sold in the West, and they are more logistically more attractive. Convenience.

　　Domestic recyclers compete with export markets for declining supply of PET bottles

　　 The outlook for the United States is still unclear, because it is difficult for recyclers to secure supply amidst strong export demand and the scarcity of post-consumer PET bottles from waste streams. As the United States begins to open to the outside world, some people are optimistic that as consumers resume large-scale gatherings and social activities, transaction volumes will increase throughout the summer. However, this may not affect supply until the end of summer. Recyclers may still have to compete with exports, and exports drove the price of PET bottles in the second quarter to highs during the year.

　　 Since the third quarter of 2020, demand in Latin America and Canada has been steadily rising, and peaked in the first quarter of 2021 due to the surge in new crown cases and the emergence of new lockdown measures. According to data from the US Census Bureau, plastic waste exported to Mexico in the first quarter increased by 90% year-on-year, while plastic waste exported to Canada during the same period increased by 25% year-on-year.