Published On: Thu, Mar 24th, 2011

PET Heats Up

Themarket for r-PET (recycled polyethylene terephthalate) continues to be red hot. The increased demand can be attributed in part to a shortage of cotton, according to a source on the West Coast.

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Cotton prices have reached record highs recently and are expected to remain at these levels as traders and farmers hoard supplies in anticipation of higher prices on international markets, according to a Bloomberg report.

Prices for polyester fiber typically climb in response to increasing cotton prices, as manufacturers seek alternatives to the material, according to Ian Hardin, a textiles professor at the University of Georgia College of Family and Consumer Sciences, who is quoted in the Athens (Ga.) Banner-Herald. The article notes, “The world’s supply shrunk this year as top cotton-producing countries like China and Pakistan suffered devastating droughts. And India, another top producer, capped its cotton exports.”

The political turmoil in Egypt, a leading producer of cotton, has exacerbated the shortage.

Virgin and recycled PET prices are rising as a result.

“It used to be in the past that there was a direct link to oil,” a broker based on the West Coast says of PET. “A $10 increase in a barrel of oil would lead to a 5 cent increase in resin.”

He continues, “Now, the driver seems to have changed. Cotton is the driver.”

The broker says that when possible, manufacturers are replacing virgin PET with r-PET. “Pricing is good and aggressive,” he adds. “It is a function of demand.”

He characterizes r-PET demand as being evenly dispersed among domestic and export buyers, though the domestic market is “reactionary” to the export market. This is in contrast to natural and colored HDPE (high-density polyethylene), where the domestic market is the driver, the West Coast-based broker says.

Of the r-PET market, he adds, “I don’t know where the top is. It is an interesting situation right now.”

A reprocessor based in the Gulf Coast region mentions a slight slowdown in demand from Chinese consumers associated with the Lunar New Year. “Demand is there, but they are trying to lower pricing.”

Demand is not limited to PET, however, as a Great Lakes region-based reprocessor who deals primarily in industrial plastics says he’s seeing high demand for these materials domestically and abroad. “Demand is real high right now,” he says of the export market. “I’m getting calls from people I have not heard from in years.”

He adds, “Everything but nylon, PP (polypropylene) and PE (polyethylene) is especially strong.”

Generation also is steady, the Great Lakes region-based reprocessor says. “Manufacturing is strong.”

The Gulf Coast-based processor says his company is still having trouble bringing post-consumer material in from Mexico. This is related to the U.S. Department of Agriculture’s stop on the import of some types of plastic scrap into the U.S.

 

Source : www.recyclingtoday.com