European recycled polyethylene terephthalate (rPET) prices remain under significant upward pressure largely due to the high prices and reduced availability of virgin PET caused by the Iran war.
Prices for post-consumer bottle bales, colourless and mixed coloured flake and food-grade pellet (FGP) all saw increases in the first half of April, with upwards pressure persisting for some sectors as the month progresses.
The current strength in demand is largely substitution-driven rather than structural, particularly with increased demand from the sheet and thermoform sectors.
Demand for rPET flake has risen since the outbreak of the war as converters and brand owners turned to recycled material to offset rising virgin PET costs and supply disruptions.
Virgin PET prices posted weekly gains since the start of March and into mid-April as European PET producers struggle with production issues and access to feedstocks, which in turn have also risen in price during the conflict.
Many of these rPET buyers - mainly from the sheet and thermoforming sectors where mandatory recycled content targets apply from 2030 under the Packaging and Packaging Waste Regulation - moved away from rPET during 2024 when virgin prices dropped well below rPET flake and FGP levels.
The war, and subsequent rise in virgin PET prices, has created a more bullish outlook for the rPET market in April and into Q2, at least in the short term. Flake sellers, many of whom have struggled with thin or negative margins throughout much of the past year, are currently able to use the tighter market to restore some profitability.
Several flake producers in Europe are running at full capacity to meet rising demand from existing customers while others turn away enquires from new or long-absent customers.
Given the rising demand and limited supply for flake, some buyers are concerned that sellers may try to benefit from the current situation and adopt opportunistic selling strategies as seen in previous years, but this has not been the case to date.
Several market participants pointed to 2022, when panic buying and supply shortages of both PET and rPET drove rPET prices to record highs, only for demand to collapse once virgin PET availability improved and prices dropped. This was then followed by very low consumer demand in 2023 as the cost-of-living crisis hit many parts of Europe.
In 2026, conflict-related disruption should be temporary. Many expect virgin PET prices to retreat once supply chains normalize, reducing the economic incentive to substitute PET with recycled material – though this will take several months after any official cessation of hostilities. When that happens, rPET demand is likely to revert to pre-conflict levels, which participants described as flat at best, and in some segments, like food-grade pellet, below expectations.
Food-grade rPET pellet markets have so far been less affected by the current volatility. Sources noted that prices for food-grade pellet have not yet fully reflected the recent uptick in flake demand, largely because underlying demand for pellets was weak prior to the conflict.
Demand from the beverage industry was flat in 2025 and the outlook for 2026 prior to the war was at the same level, even with the mandated 25% rPET target for PET beverage bottles in place since January 1 2025 as part of the EU Single-Use Plastics Directive (SUPD).
Many beverage brands, particularly larger multinational brands, are already at or above the 25% target, though smaller, more localized brands have not, in some cases, reached the target due to a lack of enforcement of that target by EU Member States.
And while brand owners continue to reference recycled content targets, cost considerations remain the dominant factor in purchasing decisions so far, with most using the minimum recycled content required to meet the SUPD or their own public commitments.
This has reinforced caution among some flake and FGP sellers, who worry that pushing prices too hard during the current bullish market could accelerate demand destruction later in the year. Several producers are practicing moderation, even as the market tightens, as they understand the importance of maintaining long-term relationships rather than using a short-lived situation to strengthen margins.
While substitution-driven demand is supporting higher prices in the near term, participants agree that the durability of those gains will depend on the length of the current disruptions in the Middle East, how quickly virgin PET markets stabilize, and on whether buyers keep faith with the use of recycled material once the immediate supply shock fades.