PET bottle and its market importance
PET or Polyethylene Terephthalate is a Code ‘1’ plastic widely used for beverage and water bottles across the world. Due to its excellent water barrier, non-toxic nature and material strength, PET plastic is used across multiple packaging products.
An approximate 480 billion PET plastic bottles are used globally, of which an approximate 1.5 billion bottles are produced everyday in India. Due to its high value in recyclability, more than 70-80% of the used PET bottles are recycled in India.
PET scrap recycling is a billion dollar industry due to its ability to be reused to create plastic pellets – plastic fibre – polyester and more.
With the changing prices of virgin plastic, there is an increasing demand for PET bottle scrap prices. The prices are dependent on multiple reasons such as Price of Crude Oil, Gaps in Demand & Supply, Rules and Regulations, Seasons and more.
The graph below shows the changing prices in 2021, due to gaps in demand and supply which were affected by multiple reasons.
This article focuses on one reason which is the effect of seasons on the PET bottle scrap prices. Below are the 4 reasons:
- Consumer Behaviour changes with season
- Change in moisture content of bottle scrap
- Logistic Challenges
- Labour Shortages
Consumer Behaviour
During the months of summer consumers tend to purchase a lot of beverage bottles, which when used adds to the supply, thereby reducing the prices. However, during the winter months the consumption is low, especially in the northern states, which significantly affects the supply inturn increasing the demand and prices.
Moisture Content
Used PET bottles are collected from bins, and bulk waste generators which are aggregated at a local waste collector. They sort and bale them to be sent across the waste management system. During this period, there is a high possibility of moisture content increasing in the bottles due to the rainy season.
This change in moisture content affects the weightage and pricing of the bales being transacted in the channels, which increases/decreases the prices depending on the location of the material.
Logistics Challenges
Logistics prices have a direct impact on the prices of scrap PET, which are affected by the festival seasons – especially during dussehra and diwali, demand for closed containers during the rainy seasons and the availability of high cube trucks which are suitable for transporting PET bottles.
A significant impact on prices was observed during the festive seasons – during which the demand for trucks across industries such as the automobile industry, FMCG sectors and other industries, is high.
Labour Shortage
Loading and unloading of PET waste, baling of bottles, processing of waste and others are labour intensive activities. During the festive seasons, especially during Sankranthi (in South India) and Diwali (in North India) there is a high shortage of labour which has an impact on the channelling and supply of material, inturn affecting the prices.
Please note the above points are based on our team’s learnings and experiences in the field
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