The recycled PET market experienced strong demand in the first quarter, with prices for colorless bottle flakes and bottle bales in Northwest Europe increasing in March. The second quarter marks the beginning of the peak season for preform production, which is likely to further boost the growth in recycled PET demand. Meanwhile, PET prices also appear to be rising but remain pressured by cheap imports, resulting in a noticeable price gap between virgin and recycled materials.

The price of recycled PET pellets in the open free-market ranges between €1,600 and €1,680 (Northwest Europe free delivered), while products linked to bottle bales or flakes are reportedly reaching €1,800 in some European regions. This contrasts sharply with virgin PET. Some market players, including beverage brands, suggest that certain brands and FMCG companies are minimizing the use of recycled PET, meeting only the minimum contractual volumes. The recycled content in beverage bottles typically stands at 25%-30%, fulfilling either the EU Single-Use Plastics Directive requirements or the companies' own targets.

The brand initially set ambitious goals, and a plastic directive was approved in 2019. After 2019, the price difference between recycled PET granules and virgin PET widened, as shown in the graph. Despite recent market fluctuations, the gap remains larger than it was before the approval of the plastic directive in 2019.

EU member states have not yet implemented clear fiscal or economic penalties for brands that fail to comply with the 25% single-use plastics directive requirements. This has led PET bottle producers and brands to continue using the minimum required recycled PET content or even 100% virgin PET, only changing when absolutely necessary. This is particularly true for small and medium-sized brands in Central and Eastern Europe, though brands in other parts of Europe may also behave similarly. In short, many brands are unwilling to pay a premium for recycled PET. The current mid-point price difference between recycled and virgin PET is €590 per ton. This has also prompted some recycling companies to sell products below market prices to reduce inventory or free up cash flow (sources: Recycling Magazine and ICIS).