Insight
The year of RPET: has it decoupled from virgin?
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
The continued war against plastics and the heightened awareness of plastic pollution has driven an unprecedented level of interest in RPET this year. There is momentum behind regulatory and voluntary commitments to collection and recycling, driving increased demand for RPET; yet collection today remains a bottleneck, resulting in intense competition among reclaimers for bale feedstock material driving high feedstock costs. While in some cases there has been a decoupling of RPET from virgin prices, other core market segments remain highly susceptible to substitutive effects from low virgin prices, which fundamentally impacts recycling margins. In this insight, Wood Mackenzie reviews the price drivers within the RPET value chain, key trends in 2019, and highlights the risks and implications for the industry in 2020. The analysis has been performed with a focus on Western European RPET prices, however, similar dynamics have been observed in the United States and Chinese RPET markets.
Table of contents
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The year of RPET: has it decoupled from virgin?
- Key takeaways:
- Momentum behind collection and recycling commitments
- The first step in recycling is collection, which remains a challenge but is key to meeting any recycling commitment
- The bottleneck in collection drives high feedstock bale prices
- RPET flake has traditionally provided savings when compared virgin polyester
- Virgin prices continued to fall in 2019
- and thus, clear flake prices have exceeded parity with virgin PET resin, driving substitution
- The substitutive effect between virgin polyester and RPET flake sets a cap on recycler revenues, yet bale remains highly coveted driving high feedstock costs, which means that reclaimer spreads have eroded to new lows
- 4 more item(s)...
Tables and charts
This report includes the following images and tables:
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EU single-use plastic directive timelineProgress in plastic packaging, recycled content and future commitmentsKey activities in PET recycling
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Blow moulding container collection volumesBlow moulding container collection ratesClear RPET flake and VPET resin price ratioReclaimer spreads eroding on weak flake prices and continued high feedstock bale costsFood grade RPET pellet and VPET resin price ratioVPET resin and food-grade RPET pellet sourcing costs example
What's included
This report contains:
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