Asian R-PET demand exceeds supply due to raw material shortage

Rising R-PET demand in Asia will continue to outpace the supply of various grades of R-PET flakes and pellets, as continued tight supplies of post-consumer bottle (PCB) feedstock prevent producers from operating at full capacity
.

Even at the height of the COVID-19 delta recovery, demand for bottle-grade R-PET has been stable across much of Asia as companies stick to their own sustainability goals
.

Demand for bottled R-PET has further increased as pandemic-related movement restrictions are eased, spurring consumption of beverage bottles by local as well as international tourists due to the reopening of some travel lanes
.

Demand for fiber-grade and film-grade R-PET pellets has also been boosted recently, as end markets including the textile industry in Thailand, Indonesia and Vietnam resume business after shutdowns during the severe pandemic
.

Seasonal demand for winter clothing in Northeast Asia and summer clothing in Southeast Asia and Australia has enhanced the desire to buy fiber-grade R-PET flakes and pellets
.

Due to the optimistic demand outlook, producers are struggling to obtain enough raw materials in their respective domestic markets to meet demand
.

In Southeast Asia, Thailand, Indonesia and Malaysia continue to face extreme shortages of packaging materials due to low levels of waste supply and different recycled polymer sectors vying for volume in the spot market
.

Due to the current rainy season, waste collection in Southeast Asia is restricted, especially in Thailand
.

Profit margins for R-PET producers remain low due to higher operating costs, in line with higher bids to ensure sufficient packaging material
.

Producers either choose to raise their offers slightly or not pass the cost on to downstream buyers in order to retain buying interest from old customers
.

Outbound trade of Asian R-PET pellets has been low as buyers in overseas markets, including the U.
S.
and Europe, have refused to take delivery from Asia due to tight container supplies and high freight rates
.