The European recycled plastics market is under severe pressure because of extremely low demand and lengthening supplies. Some recycling plants have been shut down and most others are operating at reduced rates in order to avoid excess stocks from developing. However, weak levels of demand mean that recyclers’ stock levels are steadily rising.
This situation applies to all recycled plastics sectors, but the situation is particularly precarious for PET recyclers where a fierce price war between recycled PET and virgin PET means that it is very difficult to operate the recycling plants economically.
Despite a severe price reduction of €250 per metric ton for clear flake material and a fall of €200 per tonne for clear food-grade pellets since the beginning of May, converters are increasingly switching to virgin PET where prices have tumbled in recent months. In mid-June, virgin PET prices were trading at €1150-1200 per tonne compared with €1670-1880 per tonne for clear food-grade pellets and €1140-1300 per tonne for clear flake.
European PET recyclers have also expressed concern about the record high levels of competitively-priced imported material, which has diverted demand away from locally-produced recyclate.
Other recycled plastics materials are also under downward price pressure due to very weak demand, competition from virgin material and lengthening supply.
Recycled high density polyethylene blow molding prices have declined by a total of €80 per tonne since the beginning of May while injection molding grades fell by €40 per tonne over the same period. Recycled low density PE natural film prices have fallen by €60 per tonne over the last two months, with recycled LDPE translucent film prices down by €80 per tonne. Recycled polypropylene prices have fallen by €90-100 per tonne since the beginning of May and recycled high impact PS prices are down €40 per tonne during the same period.
In July, recycled plastics prices are likely to remain under downward pressure as the beginning of the summer holiday season also weighs heavily on demand.