Impact of Covid-19 Outbreak on Recycled Polyethylene Terephthalate Market
Recycled Polyethylene Terephthalate (RPET) is a highly recyclable plastic and is one of the most widely used recycled plastic across the globe. RPET is used for various applications such as fiber for carpets, clothes, upholstery, sweaters, fiber-fill for sleeping bags and cushions, Sheet and film, automotive parts. However, one of the key growing application of RPET is in food packaging application and food grade bottles and containers. The demand for RPET is supported by the fact that RPET offers similar performance to virgin PET. Robust demand for RPET is expected for food and beverage packaging applications across the globe.
The outbreak of COVID-19 across the globe has jolted the operations throughout the value chain of the recycled polymer industry. Further, the COVID-19 had a major impact on petrochemical industry, hindering the global supply chain, change in the downstream demand, reduction in long-term investments. Furthermore, the crude demand and supply plunged leading to the volatility in the crude oil prices. This has severely impacted the virgin plastic prices which pose stuff competition to the recycled polyethylene terephthalate. Moreover, one of the key effects observed is reduced collection rates, leading to shortage of the raw material. The demand for recycled polyethylene terephthalate is expected to reduce for the non-food grade application in the near future. While the demand for recycled polyethylene terephthalate is set to surge for packaged food and water application amidst the COVID-19 outbreak.
Asia-Pacific lead by China, India, Japan, and Indonesia is the largest market for RPET across the globe. The outbreak of COVID-19 had disrupted the trade and major economic activities during the first quarter of 2020. For instance, according to the National Bureau of Statistics of China, China’s industrial output dropped by 14% in the first two months of 2020 as compared to the same duration in 2019. The chemical manufacturing output in China also slumped by 21% during the same period. However, the economic activities in the Asian countries such as China and India are the picking up the pace with cautiously relax measures. Europe is the second-largest market for recycled polyethylene terephthalate with Germany, Russia, the UK, and Italy being the major consumer in 2019. However, the outbreak of COVID-19 and lockdowns in the European countries has disrupted the supply chains and recycled polyethylene terephthalate. The concerns over the long-term impact of COVID-19 outbreak on the European recycled polyethylene terephthalate market sharply escalated in the recent past. However, the recycled polyethylene terephthalate market is expected to gain benefit from changing consumer behaviour such as increasing demand for packaged food and bottled water.
Albeit, COVID-19 has disrupted the supply chain, the recycled polyethylene terephthalate market is not much affected.