Chloe Kinner, European editor for Argus Recycled Polymers, talks to Antonello Ciotti, president of Petcore Europe, about the outlook for recycled PET and virgin PET markets.


  • Current trends and their effect on the recycled polymers market and key drivers for 2024’s outlook. 
  • What changes to plastic and packaging regulations may mean for the market.  
  • Other key factors the industry needs to stay close to in 2024 and beyond. 

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Chloe: Welcome to this "Chemical Conversations" podcast for Argus Recycled Polymers, brought to you by Argus Media. I'm Chloe Kinner, the European editor for Argus Recycled Polymers, and I'm joined today by Antonello Ciotti, the president of Petcore Europe. Antonello, welcome, and thank you for being with us today.

Antonello: Thank you for invitation and hello to everybody.

Chloe: We are looking forward to joining you at the Petcore Europe Annual Conference that's held in Brussels over the 7th and 8th of February.

Antonello: Looking forward to seeing all of you there.

Chloe: We wanted to take this opportunity at the start of the year to look back on 2023. And more importantly hear your outlook on the year ahead for both the recycled PET and virgin PET market in 2024.

Antonello: Let's start by looking at the past couple of years, because when we say that the market is very dynamic, it is. What happened? We had the two years of the pandemic. At the end of these two years, consumers started spending as if there was no tomorrow, the market was booming. Everybody was very happy to see the sun again. During the pandemic, it was very important to see that PET had a strong presence of manufacturers in Europe, because this period was very difficult to buy a car, to get microprocessors. So, the importance of having a local industry was somehow emphasized by the critical crisis of pandemic. But in February 2022, the war started in Ukraine, and nobody could believe it happened. But yes, this was unfortunately the reality and then the sanction against Russia.

Russia was at the time the strongest supplier, the largest supplier of gas and oil to Europe. The lack of this supply immediately pushed the price of energy in Europe up to the sky, up to a point that the European prices at the historical record, both for virgin and recycled PET. But nevertheless, consumers kept buying both virgin and recycled PET. During 2023, end of '22 into '23, there was a collapse of prices of logistics and carriers from Far East into Europe. And this supported a huge increase in imports. Why the huge increase in imports? Because all the oil that Russia was supplying into Europe went directly in China. But previously China was buying oil mainly from Iran. Iran had sanctions due to the UN regulations and all the rest. So, Russians, to displace the Iranians, had to sell at a price lower than the Iranian price that was much lower than the European price.

So, the net result of all these transactions, the political mess is that China was, and probably still is enjoying having oil prices, energy costs, at probably half the cost of Europeans. And this was pushing European manufacturers, both of virgin PET and of recycled PET basically out of the market. Consumers started to reduce their buying attitude, and at the same time paid even more attention to the cost difference. So, when the brands realized that there was virgin PET coming from outside of Europe at very low price, they didn't reduce only the consumption of virgin PET of Europe, but replaced the recycled content from the high targets they had in 2022 to minimum targets that they are applying now.  A key learning, the recycled content is staying very high only if there is a mandatory request. And the consumer wants to have recycled content but is not willing to pay any extra cost to have the recycled content in the bottles or in any other item.

Chloe: 2023 was a really challenging year for both the virgin and the recycled PET markets. Demand from the packaging sector was lackluster. We had the background of high inflation and the cost-of-living crisis in Europe. And general reduced consumer confidence that really weighed on the markets, as well as the topics that you touched on. So, it was a very challenging year. At the start of 2024, it feels a little bit more optimistic. Recyclers across the region tend to believe that prices have bottomed out in 2023 and maybe 2024 is a little bit more positive.

Antonello: We must be open to market dynamics and as you said it is very dynamic. What is the situation now? If you look again at the macro economy, we have provisional anti-dumping in place on virgin PET against China. But more relevant than this, there is the crisis in the Red Sea. And this is increasing both the cost and the logistic cost of imports, but also is increasing the timing to move the goods from the Far East into Europe by two weeks. This is an increasing cost for the main competitor. So, the European price is moving up for both virgin and recycled PET. But more relevant is what's happening in Brussels. We are now in the frame of the final discussion of the new packaging, packaging and waste regulation and the implementation phase of the Single Use Plastic Directive (SUPD). There are a couple of points that are extremely interesting. In the SUPD, we are very concerned about the fact that each member state could go in a slightly different direction, somehow undermining the possibility of having a common market for our goods in Europe. So Petcore, with all the associations that are part of Petcore and its allies, is monitoring whatever is happening in Brussels, but also in various countries. Regarding plastic and packaging regulations, there are lots of issues popping up every day. But one of the most relevant is that DGNB has somehow highlighted that it is still considering accounting for recycling contents of only material that has been collected after it has been placed on the market. This "placed on the market" requires a further interpretation, because according to some members of DG, they claim that "placed on the market" means placed on EU markets.

And these could change drastically for mandates that we have seen so far, with a lot of imports of flakes coming from outside Europe. Petcore is monitoring this. As there is an issue in terms of both cost and hygiene consideration, we welcome the decision of the DGNB. But at the same time, we are concerned about the banning of certain products as we are all for an open and global market. But this is irrelevant because, from a point of view as a European citizen, why should I increase collection outside of Europe? The target of SUPD was to increase collection in Europe from a pure sustainability point of view, so does it make sense to use product that's being collected 10,000 kilometers from where I live, while the one collected in Europe becomes less attractive? So, there is really a lot of food for thought that is going to be discussed at our conference in Brussels.

Chloe: The single-use plastics directive that you're talking about sets out an obligation for PET bottles to include at least 25% recycled content by 2025. If that recycled content comes from the EU market, does that also affect the PPWR and the single-use plastics?

Antonello: Correct. Because the two, the directive and the regulation, are somehow linked. Because if in the regulation there is this request on recycling content containing only what has been collected in the EU market, as an implication on this 25% that is foreseen by the SUPD.

Chloe: As you said, the single-use plastics directive really was set out to increase collection and recycling in Europe. One of the issues that European recyclers see is that the European recycling collection schemes are typically more expensive than schemes abroad.

Antonello: This is a key point. There is no way that European collection could be competitive with the collections made in India, in China, in Egypt, or in Morocco. So, we must be clear among ourselves, Europeans, if we want to push European collection, we have somehow supported the burden of the extra cost. So, if you leave to a market to decide, the markets, the economics, will dictate to move between. To somehow appreciate the products more that are coming to locals from outside of Europe.

Chloe: Overall, all these legislative targets, brand targets, and voluntary targets that are out there, that's given a little bit more strength to the markets in 2024, 2025, and beyond?

Antonello: Correct. At this point, 25% of the weight of a bottle, so in terms of PET, it means around 30%, because you must consider the label, the cap, that are not made of PET. And you must contain 25% of recycling content. So, this will be a boost to the European market for recycled PET. But we must consider that we need somehow to better define how to manage the imports, through, a temporary ban until we have the proper certification coming also from countries outside of Europe. Because our key concern is that a simple certification could be accepted by European authorities to demonstrate that the recycled content is really coming from whatever has been placed in the market. There were stories in 2023 claiming that some producers outside of Europe, since the price of recycled PET was so high in Europe, were using new bottles without being filled, but these new bottles were simply used to produce recycled PET. Or that in some products, claiming to contain a certain percentage of recycled content, in reality, recycling content was approaching zero. We need to protect the European consumer from this general greenwashing that somehow is dictated by unfair practices mainly coming from outside of Europe.

Chloe: So, we've got provisional anti-dumping duties on PET resin from China. Now, those provisional duties range from 6.6% to 24%. And our understanding is that towards the middle of the year, we will start to see a finalized decision on those. I think one of the key things for our listeners is that although this is intended for the virgin PET resin market, the recycled resin also trades under the same HS code. So, it will inadvertently affect both the virgin and recycled markets.

Antonello: But more than this is that the recyclers are fully on board in the sense that the anti-dumping protection has been required both on virgin and recycled PET. The investigation is still going on, so there is not too much I can say on this. And the decision should be made by mid next year, we expect June at the latest. But if you look at the global map, Europe is the only region not having anti-dumping against PET coming from China. So, if all the other regions have already taken action, and lately also even South Korea is taking action against China, it means that from China, there is a sort of economic war to conquer, to increase market share outside of China. Already today, the domestic demand in China is covering only 50% of the production. And the gap between the China PET virgin production and the Chinese PET consumption is larger than the total European market. So already China could supply all the manufacture of bottles in Europe, disposing all European manufacturers. But this clearly is not acceptable because as we have seen earlier, Europe, Brussels is asking all European producers to look to the future, to invest in sustainability, to look at chemical recycling. So, a lot of investment from our side needs proper protection.

Chloe: If I asked you to try to summarize your outlook for 2024, and maybe a couple of highlights for people to look out for in both the virgin and recycled markets, what answer can you find?

Antonello: Let's say that if in 2023 we were all crying, now 2024, we could smile a little bit as the situation is evolving in the right direction. Let's look at the logistic cost evolution. Let's look at how the regulation is going to be implemented by Brussels. Let's look at the SUPD Implementation Act that is discussed in every region. I am a little bit more positive than I was a couple of months ago.

Chloe: Great. Thank you very much, Antonello.

Antonello: Thank you, Chloe.

Chloe: Thank you everyone for listening. 

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