Recycled resin prices in Europe continue to drop

The downward price trend for recycled polymers which began late summer 2022 continued into February and March. Weak demand because of the economic downturn is the root cause of the downward price trend. Other contributory factors include more competitively-priced virgin material and the lower cost of plastic scrap.

Material availability remains on the low side as recyclers are reducing operating rates at their plants to avoid a supply overhang amid the weak demand. Nevertheless, there was sufficient material to meet demand across all product sectors over the last two months. Supply improved slightly in February as several recycling lines have been brought back into operation following maintenance. Material availability of recycled PET, polyethylene and polypropylene in particular has improved as additional capacity has come back come on stream.

Recycled PET prices posted the largest discounts in February with clear flake and clear food-grade pellets falling by €90-100 per metric ton. Recycled PP prices were down by €45-50 per tonne in February, while recycled high density PE prices fell by €30/tonne and recycled low density PE prices were down €30-40 per tonne. Recycled high impact polystyrene prices fell by only €10 per tonne.

Recycled plastics prices fell further during the first week of March. The price downturn could however lose some momentum over the next few months. While demand is quite likely to improve over the next few months as processors start to replenish stocks, demand is still well below normal levels.

Recycled PET
The downward trend for recycled PET prices accelerated even further during February because of low demand and the falling cost of bottle scrap. Clear food-grade pellets and clear flake prices fell by €90-100 per tonne while colored flake prices fell by €65-70 per tonne.

Demand remained hampered by the beverage bottle-making industry being in low season and also by the much lower prices for virgin PET. Virgin PET prices have tumbled over €150 per tonne since the start of the year. The gap between recycled PET clear food-grade pellets, clear flake prices and virgin PET prices remains very wide at €750 per tonne and €340 per tonne, respectively.

Recyclers kept production at a low level because of the weak sales but output was more than enough to meet demand. There was no shortage of bottle scrap reported.

In March, a further softening in recycled PET prices is likely as demand is expected to remain weak while supply is expected to lengthen.

Recycled LDPE, HDPE
In February, recycled LDPE prices fell between €30-40 per tonne because of continued weak demand and improving supply. Production rates have been stepped up but still remained below normal levels. Demand remained flat despite some restocking.

In March, demand is picking up a little but was unable to prevent further price erosion despite supply remaining at a low level.

In February, recycled HDPE prices fell by €30 per tonne due to continued demand weakness and improving supply. Processors were ordering only limited volumes due to low order intake from their customers. Material availability improved because of some recycling plants coming back on stream after maintenance turnarounds.

Recycled HDPE prices are sliding again in March but the downward trend appears to be losing momentum. Processors’ order books are beginning to improve and there is also stock replenishment taking place.

Recycled PP

In February, recycled PP supplies continued to improve while demand remained well below normal levels. As a result, price reductions accelerated compared to the previous month, falling by a further €50 per tonne. Imports of low-cost virgin material from Asia also contributed to the downward pressure on recycled materials.

In March, recycled PP prices are declining further but at a reducing rate. Demand is recovering but still remains below a normal level. Material availability is more than sufficient to meet the low demand.

Recycled HIPS
In February, recycled HIPS prices edged almost €10 per tonne lower in a fairly well-balanced market. Demand benefited from some stock replenishment but overall sales were lower than normal. Production remained at a low level but there was still sufficient material to satisfy the low level of demand.

Prices showed little change during the first two weeks of March. Processors’ order books were very low and hence were holding back on placing new orders. R-HIPS availability was also low as producers maintained reduced operating rates.