In the second half of 2021, the global R-PET market is facing the dilemma of tight supply and strong demand

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

The same global shipping concerns weighed on the R-PET market in the U.
S.
and Europe, at least in Europe, where transparent sheet prices rose to a decade high in the second quarter while Southeast Asian markets were curtailing export opportunities due to high freight rates
.

In addition to immediate demand, uncertainty over when much of Asia and Europe will return to normal post-pandemic has given buyers pause to think about how much PET will be in demand in the summer, which in turn will weigh on the supply of PET bottles in autumn make an impact
.

European market volatility intensifies as buyers scramble for materials

The European R-PET market will enter the second half of the year with instability
.
Tight supply and unexpectedly strong demand across the value chain have pushed the R-PET transparent sheet market in Northwest Europe to a decade high
.

In the second half of 2021, the existing market dynamics are likely to persist for some time; suppliers cannot supply the required quantities, while buyers demand delivery as soon as possible
.

It is the combination of these fundamental factors that has created a period of volatility throughout the R-PET value chain, making it difficult for participants to even determine volumes and prices this month, and almost impossible to determine prices into summer
.

"I couldn't even get a car of clear sheets to sample the new line until August," said one buyer
.

For many in the market, however, expectations of continued volatility coupled with demand uncertainty are slowly surfacing, meaning the outlook for fluid materials is promising in the coming months
.

"Countries are still in various forms of lockdown.
.
.
I'm worried if demand will be good this summer, I don't want to be stuck with expensive materials, so I'm not hoarding, just meeting my monthly needs
.
" A packaging producer Business said
.

High freight rates dampen export potential, boosting domestic demand in Asia

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

Although PET packaging supply has improved in some countries such as China, most Asian markets are likely to face continued supply constraints due to an uncertain outlook, especially after the second outbreak of the virus in India and other countries
.

The situation will be particularly acute for transparent high-quality packaging due to rising demand from brand owners, coupled with the emergence of new R-PET food-grade pellet projects in Southeast Asia in the second half of 2021 or early 2022, sources said
.

Meanwhile, unclear fundamentals for virgin PET and polyester could put price pressure on R-PET in price-sensitive applications such as fibers, sources said
.

Additionally, container shortages and expensive shipping remain a challenge for Asian R-PET sellers who want to export and get better prices in the West
.

Sources pointed out that it could take months to ease the global container tension, which one source said could last until the end of 2021
.

Given export difficulties, Southeast Asia (at least ASEAN and Asia-Pacific) has increased its focus on accelerating domestic demand
.

Failing that, Australia could be a better destination in the short term, as people have heard prices in Australia are as attractive as selling to the West, and logistically more affordable, a South East Asian source said.
Convenient
.

Domestic recyclers compete with export markets for dwindling PET bottle supplies

The U.
S.
outlook remains unclear as recyclers struggle to secure supplies amid strong export demand and a lack of competition from post-consumer PET bottles from waste streams
.
As the U.
S.
begins to open up to the outside world, there is optimism that transaction volumes will increase throughout the summer as consumers resume mass gatherings and socializing
.
However, this may not affect supply until late summer, and recyclers may still have to compete with exports, which have driven PET bottle packaging prices to year-highs in the second quarter
.

Demand in Latin America and Canada has been rising steadily since the third quarter of 2020 and peaked in the first quarter of 2021 due to a surge in Covid-19 cases and new lockdown measures
.
According to the U.
S.
Census Bureau, plastic waste exports to Mexico rose 90% year over year in the first quarter, while plastic waste exports to Canada rose 25% year over year during the same period
.