PET Market Heats Up

Demand for PET (polyethylene terephthalate) is increasing, both domestically and offshore, according to sources. “PET demand has increased with export pressure and increased domestic capacity,” a recycler based in the Midwest says.

“The Chinese are being very aggressive on buying PET bales,” says a reprocessor based in the South. He adds that a shortage of cotton in China has led to increased demand for PET fibers in that country.

The Midwest-based recycler reports strong demand and competitive offers from China for LDPE (low-density polyethylene) in addition to PET bottles.

A reprocessor based in the Southeast also reports increasing exports of fiber and film, however, he says the export market remains soft for other secondary plastics.

Closer to home, the U.S.-Mexico border in Laredo, Texas, has been closed to post-consumer PET and HDPE (high-density polyethylene) bales, and much of the material that would normally be sent to Mexico is now being shipped to China, the reprocessor based in the South says.

According to the reprocessor, Chinese ports are not accepting baled material, but recyclers are still able to ship that material into Hong Kong.

The Midwest-based recycler says it seems like Chinese ports have allowed more shipments of bottles into the country, adding, “This is good news for prices and demand for bottle grade material.”

However, the Chinese New Year, which is Feb. 3, 2011, could negatively affect shipments into that country if the traditional business slowdown occurs and ports are temporarily closed in honor of the holiday. “If so, this will create some problems in the export market in terms of shipping and pricing,” the Midwest-based recycler says.

The market for HDPE, which has experienced some softening this fall, pales in comparison with the PET market. The secondary HDPE market is being influenced by declining demand and lower pricing for virgin material. “HDPE has softened domestically partly due to a drop in seasonal demand for products such as drainage tile,” the Midwestern recycler says. “Stagnant natural gas prices are helping to keep virgin HDPE prices in check, which in turn keeps recycled prices lower.”

Earlier tightness in container availability for overseas shipments appears to have eased in the fourth quarter, according to sources. The Midwest-based recycler says, “Containers seem to be available when needed from Chicago and Kansas City. You don’t always get a 45-foot high cube, but we have been able to make do with what is available.”

While availability may be less of a concern for shippers in the United States, container prices are escalating in some regions, according to sources. The reprocessor based in the South reports a $300 increase in container prices in October.