North American PET bottle resin prices surged an average of 3 cents per pound in January, marking the fifth consecutive monthly price increase for that material.
Higher feedstock prices were cited as reasons for the increase by market watchers contacted by Plastics News. Regional PET prices had increased by 2 cents per pound in December after absorbing 1-cent increases in each of the previous three months.
The late-year hikes surprised some market watchers, as bottle resin demand typically declines in winter months, along with sales in its leading bottled water and carbonated soft drink (CSD) end markets. Processors now may be stocking up on material in advance of warmer summer months.
North American PET prices finished up a net of 5 cents per pound for full-year 2016, according to the PN resin pricing chart.
Bottled water overtook CSD in U.S. consumption for the first time in 2016, according to the Beverage Marketing Corp. consulting firm. For the year, bottled water consumption grew 8.5 percent, while consumption of CSDs dropped 1.7 percent, BMC executive Gary Hemphill said at the recent Packaging Conference in Tampa, Fla.
About two-thirds of bottled water consumption comes from single-serve containers, he added, which means that more and more water is being served in PET bottles. Overall, plastic accounted for 41.2 percent of all beverage packaging units in 2016, up from 36.5 percent in 2012.
Bottled water accounted for 20.5 percent of the overall U.S. beverage market last year, according to BMC, almost a full percentage point ahead of CSD at 19.8 percent.
On the capacity front, the major North American event for 2017 will be M&G Group's startup of a 2 billion pound-per-year plant in Corpus Christi, Texas. That plant is expected to open in the second half of 2017, with some of its output being shared by fellow PET maker DAK Americas of Charlotte, N.C.
Although many market watchers consider the North American PET market to be oversupplied, they also believe that Houston-based M&G is going through with the expansion project in order to gain the economic benefits of full supply integration. The firm also is building a plant for purified terephthalic acid feedstock at the same site.