The North American PET market can’t catch a break, while high demand from brand owners makes rPET hard to find.

Jeremy Pafford

November 15, 2021

4 Min Read

For much of 2021, the ability to source packaging resins has been challenged unlike most years before. Much to the relief of many packagers’ procurement departments, finding polyethylene (PE) and polypropylene (PP) in North America has become much easier as autumn gets set to transition into winter. Even a few resin sales teams are probably happy with a less stressful end to 2021 on tap, even if that ends up cutting into profit margins a tad thanks to declining PE and PP prices.

Those dealing in the polyethylene terephthalate (PET) market still need to take their stress balls to the negotiating table, and if they are also talking recycled PET (rPET), they might need to take along their favorite lucky charm as well.

While sustained increased production has bolstered PE and PP supplies, the North American PET market has had a difficult time catching a break and has been beset by sustained robust demand, upstream production issues such as a current force majeure from a Mexico PET producer and one in recent months from a US producer, and then the backbreaker — high logistics costs on imported PET from Asia.

Unlike PE and PP, North America absolutely needs PET from a region such as Asia to meet demand on this continent. Normally that is not an issue, but these are not normal times. Container rates from Asia to the US West Coast are adding upwards of another 50 cents/pound to Asia-sourced PET and leading to overall higher prices in the PET market. That is how you end up with a price graph like the one below that is severely averse to downward trajectories.


Of course, just one of those price lines belongs to PET. The other two represent prices for US East Coast and West Coast rPET food-grade material — the Holy Grail of rPET; such material is in high-demand from brand owners and sometimes requires a quest to find.

As noted recently by Emily Friedman, ICIS’s senior editor for recycling markets in the US, “the industry has been really challenged to source some of these plastic pellets.”

A correlation between virgin PET and rPET used to be more apparent, and although the graphic makes it appear that virgin PET and rPET markets remain strongly linked, different reasons account for the relentless bullishness of resin prices: 

  • Brand owners need PET and rPET for packaging consumer goods such as drinks, foods and soaps that continue to be in high demand.

  • Many of those brand owners have commitments on the books to increase their recycled material content.

  • There is not close to enough rPET to meet those commitments at present, leading to higher prices for rPET.

  • Virgin PET remains by far the dominant PET type to meet the resilient need for consumer goods packaging and requires imported material to meet overall North American demand, leading to higher prices.

Unlike the 2022 outlooks for PE and PP that show a sustained period of margin deflation following this year’s high-price environment, ICIS and Chemical Data (CDI) views for PET and rPET see those markets’ 2021 factors duplicating into next year. The kinks in global logistics do not seem likely to get unwound any time soon, so those added costs will have to be factored into the virgin PET market.

Meanwhile, brand owners’ thirst for rPET will only increase, not decrease, as consumers continue to push for solutions to plastic waste. One of the few near-term risk factors that could cool off the market would be consumer demand for packaged goods decreasing due to recessionary economic conditions. Continued inflationary pressures that evaporate buying power could lead to that and is something to watch out for in the coming months, although many economists doubt that comes to fruition.

If so, get used to higher PET and rPET pricing in 2022 and instead find joy or comfort in the goods they are being used to package.

Jeremy Pafford, head of North America market development, drives ICIS’s business development strategy for the US, Mexico and Canada and represents ICIS to chemical and polymer markets to showcase the company’s expertise. Pafford draws upon experience in leading engagement efforts by the Americas team over the last several years.

About the Author(s)

Jeremy Pafford


As Head of North America for Market Development, Jeremy Pafford drives ICIS’s business development strategy for the US, Mexico and Canada and represents ICIS to chemical and polymer markets to showcase ICIS expertise. His role draws upon his experience in leading engagement efforts by the Americas team over the last several years.

Previously, Jeremy served as Managing Editor, Americas for ICIS, leading the team analyzing Americas chemical markets such as ethylene and propylene, polymers, solvents and oleochemicals. Jeremy has covered several markets himself and has authored research and presented at major events on topics such as the North American shale boom, US-China trade tensions and how macroeconomic trends translate into chemical market trends.

A native of Texas and a resident of the Houston suburb of Cypress, the University of Kansas graduate has been with ICIS for more than eight years and has worked in the publishing field for more than two decades.

Pafford's LinkedIn profile is found here.

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