Pricing report shows decline in pet prices after Chinese withdrawal.

ICIS pricing (www.icispricing.com), a global information provider to the chemical and oil industries, launched a weekly pricing report for the European Recycled Polyethylene Terephthalate (RPET; www.icispricing.com/il_shared/Chemicals/SubPage621.asp) market last year in the midst of high crude and virgin PET prices. Since the fall, however, prices have softened, chiefly because of a partial withdrawal of Chinese buyers from the European market, according to the report.

With fewer post-consumer bottles, either baled or shredded, leaving the local arena, the balance of supply and demand shifted in favor of local buyers, according to ICIS. The fiber market, which uses recycled PET for applications such as fleece and toys, has experienced a decline in prices of cotton. When coupled with European Uinion trade quotas for textiles, this resulted in lower demand by Chinese buyers for recycled material from Europe, according to the company.

Report editor Peter Gerrard says, "Prices of Recycled PET, as in the virgin PET market, are subject to the seasonal variations reflecting consumption of cold beverages and, as a result, prices in the winter should be high and supply low. This was not the case last winter because of the decline in Chinese interest. Converters also amassed larger stocks to see them through the winter in order to avoid the usual problem of availability in that season."

However, more recently, there have been signs that values of bottles and flakes have begun to firm up again.

However, the approach of warmer weather means greater consumption of cold beverages, which always stimulates the supply of recyclers' raw material, which should begin to exert downward pressure on prices throughout the sector unless there are any significant deviations from the normal seasonal pattern, according to ICIS's analysis.

"The background to the European recycled PET market is still strong, with national collection rates increasing and the market is expanding in new processing and end-user applications," Gerrard says.

ICIS reports on weekly price assessments of the recycled PET market with details for bottle, flake and food grade. The report also contains market intelligence and commentary on the demand and supply situation, EU legislation, export demand from the Far East, production news, state of the virgin PET market and trends and developments in the recycling industry.