Malaysia, Indonesia rPET Sales Slowed by Higher Freight Costs: Sources

Malaysia’s and Indonesia’s recycled polyethylene terephthalate or rPET sellers are facing weaker overseas demand as rising freight costs reduce the competitiveness of recycled material in international markets, according to market sources.

Sellers across both countries said higher ocean freight rates have significantly increased the delivered cost of rPET flakes and pellets, making it more difficult to secure export orders despite relatively stable production costs.

Market sources noted that overseas buyers have become increasingly price-sensitive, with some delaying purchases while others seek alternative suppliers closer to their end markets to reduce logistics expenses.

“We can’t sell now. Shipping rates are crazy expensive now,” a Malaysia-based seller said.

Sources added that higher shipping costs have narrowed profit margins, while recyclers have been reluctant to reduce selling prices further due to operational costs.

At the same time, lower virgin PET prices have further intensified competition, as cheaper virgin resin has become a more attractive option for buyers in markets without mandatory recycled-content requirements.

Market sources expect international sales from Malaysia and Indonesia to remain muted unless freight rates ease or overseas demand strengthens enough to offset higher transportation costs and restore the competitiveness of regional rPET exports.

—Reporting by Xin Nee Chua, xchua@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com