The Recycled Polyethylene Terephthalate (R-PET) market in Germany experienced significant challenges during December 2024, with demand and supply changes indicating broader economic pressures. Manufacturing activity decreased sharply due to reduced output and new orders, adding further difficulties to the industries that rely on recycled materials like R-PET.

A substantial monthly price recovery of about 7% in December showed the efforts by market participants to stabilize the market, following a 4.6% decline in the previous month. However, weak demand continued to affect the price growth, further intensified by market uncertainties and increased inventory levels among buyers. Production volumes were limited, especially in the intermediate goods sector, as manufacturers dealt with moderate demand for R-PET.

On the supply side, competition from the virgin Polyethylene Terephthalate (PET) market, because of reductions in its prices, maintained pressure on recyclers’ margins. Despite slight improvements in material availability, operational costs remained a critical challenge. Legislative initiatives aimed at increasing recycled content in PET bottles failed to increase demand effectively, as most manufacturers failed to meet the stricter recycled content requirements for R-PET.

Employment levels in the manufacturing sector decreased further, marking continuous cuts for the past one and a half years. Companies reduced raw material and end products’ inventories, though the slower rate of reduction in December indicated some stabilization in supply chain pressures. Despite this, the industry's overall growth expectations for R-PET remained average due to continued uncertainty in sectors such as construction and automobiles.

In the first week of January 2025, R-PET prices in Germany stabilized at USD 1,330 per MT for flakes grade on an FD-Hamburg basis. The 2.3% price increase in the final week of December highlighted a cautious recovery as recyclers prepared for potentially stricter regulations. However, demand for R-PET remained muted as legislative changes had yet to translate into immediate improvements.

Looking ahead, optimism remains moderate. While stricter requirements for recycled content may provide support for the R-PET market, manufacturers face challenges in adapting quickly to these changes. Additionally, recyclers are likely to focus on overcoming the impact of high input costs while preparing for gradual demand recovery. The coming months are expected to be challenging for the R-PET market as it navigates persistent economic challenges and regulatory changes.

The R-PET market, showing a notable increase in December and a stable start in January 2025, remains under pressure due to legislative uncertainties, high costs, and limited demand recovery. Market participants expect cautious growth while closely observing the changing regulations and market conditions that may shape the R-PET’s price trajectory.