Economic Changes Cause Price Modifications in the U.S. R-PET Market in May 2024

In response to recent shifts in the economy and market trends, the US R-PET market has experienced stable pricing, with a recent uptick. As of May 31, 2024, the price for clear flakes grade in Los Angeles was approximately USD 1,230 per metric ton. This increase follows a period of consistency in the past five weeks, reflecting adjustments in demand and the overall economic situation.

Throughout May, the US Manufacturing PMI indicated robust growth in the manufacturing sector, reaching a two-month peak in output primarily due to a surge in export orders, the highest in two years. Regardless of this positive growth, new orders decreased for the second consecutive month, representing cautious optimism among manufacturers, including those in the R-PET industry.

Rising input costs have presented challenges for manufacturers, owing to increased prices for metals, chemicals, plastics, timber-based products, energy, and labour. This inflation in input costs, the most noticeable in a year and a half, has been passed on to customers through higher selling prices, contributing to enhanced inflation in the manufacturing sector, including the R-PET market.

In the initial four weeks of May 2024, the R-PET market witnessed a relative stability in prices, with clear flakes grade consistently trading around USD 1,210 per metric ton. However, by the week of May 31st, prices surged due to escalating demand and greater freight charges, leading to a price hike for R-PET.

The increase in R-PET prices was driven by heightened demand from key sectors like packaging and food processing. Previously balanced due to a steady supply and demand ratio, R-PET prices escalated in the fourth week of May due to increased demand.

While fluctuations in post-consumer PET bale prices impacted production costs for R-PET manufacturers, overall cost pressures were somewhat manageable as upstream crude oil prices further decreased.

The manufacturing sector witnessed substantial growth in total employment due to heightened orders and improved business prospects. However, input cost inflation accelerated in both manufacturing and service sectors, marking the second-highest increase in eight months, reflecting the broader inflationary pressures faced by manufacturers, including those in the R-PET sector.

The prospect for the R-PET market in June 2024 remains prudently positive, with business confidence returning from a five-month low since April 2024, though still below long-term averages. Market outlook is influenced by suspicions related to inflation, interest rates, and geopolitical factors.

In conclusion, the US R-PET market is presently navigating a transitional phase impacted by wider economic shifts and specific industry dynamics. Recent price adjustments highlight the balance between supply and demand, cost escalations, and evolving economic circumstances.