SÃO PAULO (ICIS)–Brazilian demand for premium‑grade recycled polyethylene terephthalate (rPET) flakes is set to continue weakening as the competitiveness of virgin material strengthens and supply‑chain dynamics shift.
- Premium flake demand has slumped versus virgin
- Pellet makers are cutting external flake buying
- Quality-premium spreads have collapsed
Significant capacity has been built for non‑pellet‑verticalized premium‑grade rPET flake lines in recent years.
That capacity was added primarily to serve premium rPET applications, especially food‑grade pellets.
Recyclers equipped to produce flakes with polyvinyl chloride (PVC) contamination below 50 ppm – a key benchmark for premium quality – and similarly low levels of other contaminants are now struggling to place material.
DEMAND PATTERN CHANGES IMPACT PREMIUM‑GRADE FLAKE OUTLETS
Pellet makers are increasingly aiming for tighter control over the supply chain from bottle bale procurement onward, relying on in‑house washing and, at most, sourcing pre‑washed flakes for internal reprocessing.
This shift has sharply reduced offtake for premium flakes.
Alternative outlets are also dwindling.
Thermoforming, once a key demand center for high‑purity flakes, has largely migrated to virgin PET as low resin prices and tight converter margins undermine the economic case for rPET feedstock.
Other lower‑value applications, such as fibers, coatings and arch tapes, are also shifting toward cheaper virgin resin.
Those still using recycled material typically do not require elevated specifications and cannot absorb the higher costs associated with premium flake production.
Recyclers’ economics have deteriorated accordingly.
The yield‑adjusted spread versus bottle bales for premium super‑washed flakes has fallen from around Brazilian reais (R) 1.0 ($0.19) in September 2025 to R0.7 in January 2026, while the spread over lower‑quality hot‑washed flakes has shrunk to nearly zero.
Post time: Feb-03-2026