Standard recyclate producers in Europe are struggling to pass higher raw material costs to converters because of ongoing low demand and competition from low-priced imports.
The recycled PET sector has seen the largest price increases, but input costs increased at a faster rate in May, squeezing recyclers’ profit margins. Recycled PET clear flake prices increased by €150 per metric ton in April and have gained a further €40 per tonne this month. Recycled PET clear food-grade pellet prices have increased by €100 per tonne over the two months with colored flake prices up by €60 per tonne over the same period. Recycled PET is benefiting from an upturn in volume calls and the higher cost of virgin material.
The price upturn for other classes of standard recyclate over the last two months is much lower. Recycled low density polyethylene prices have increased widely from just €10 per tonne for black extrusion pellets to €60 per tonne for natural film. Recycled high density PE prices have increased by €20-30 per tonne and recycled polypropylene prices are up by €20-40 per tonne. Recycled high impact polystyrene prices have risen by €40 per tonne.
In most cases, the price increases for these classes have been insufficient to cover the increased purchasing cost, and hence recyclers’ profit margins are squeezed further.
While volume calls across all standard recyclate types have picked up slightly over the last two months, demand remains well below normal levels. Recyclers continue to run their plants at rates just sufficient to meet demand and to avoid a build-up of stocks.
Recycled PET
In April, lear flake prices soared €150 per tonne with clear food-grade pellet and colored flake prices each up €50 per tonne. The upward price trend is driven by robust buying interest from converters, plus, the European Commission’s proposed recycled content goals pushed more converters to use recycled PET. Lower collection rates are keeping post-consumer bottle bale prices under upward pressure, which corresponds into less PET output and higher pricing.
In May, recycled PET clear food-grade pellet and clear flake prices increased by €40-50 per tonne because of an increase in the cost of bottle scarp and good seasonal demand. Colored flake prices were up by €5-10 per tonne with just a modest rise in colored bottle scrap costs. An increase in imports of recyclate from Asia meant that producers were mostly unable to pass through the cost increase in full.
Recycled HDPE
Recycled HDPE prices continued to rise slowly in April with gains of €20 per tonne. Producers insisted on a price rise given higher costs and a small pick-up in volume calls, particularly from the cosmetics and personal care sector.
In May, producers were largely unable to pass through the price increases they called for due to growing competition from low-priced imports of virgin material. Producers maintained production curbs but there was still sufficient material to meet contractual obligations. Volume calls by the construction and automotive sectors remained low.
Recycled LDPE
The upward price trend moderated slightly in April with gains of €20 per tonne for natural film and translucent film grades and a rise of €10 per tonne for black extrusion pellets. The sharp uptrend for virgin LDPE prices in recent months has prompted some converters to order more recycled material.
Recycled LDPE prices continued to gain ground in May with prices for natural film up by €40 per tonne and translucent film prices rising by €20 per tonne, which just about covered the increase in the cost of scrap. There was more than sufficient material to cover demand despite ongoing production curbs. Volume calls remain at a low level.
Recycled PP
In April, recycled PP copolymer prices edged €20 per tonne higher with homopolymer material up by just €10 per tonne. Prices were supported by a modest recovery in seasonal demand and further switching from virgin material to recyclate.
Recycled PP prices nudged higher in May, rising by €10-20 per tonne on the back of higher raw material costs. Recyclers continued to produce just enough material to meet the low level of demand. The only positive demand push appears to come from the horticulture market.
Recycled PS
PS recyclers raised prices by €30 per tonne in April; quite a modest rise considering the soaring cost of virgin material. Recyclers hope to pass on larger price increases over the coming months, bearing in mind the widening price gap between recycled and virgin material.
There was a wide disparity in prices in May with some recyclers offering a discount and others raising prices in line with higher purchase costs. On balance, prices gained around €5-10 per tonne. Recyclers reduced their production rates in line with the low level of volume calls.