The European recycling industry has, for the most part, continued to suffer from falling prices and profitability during the last two months.
Recycled plastics prices are under severe pressure because of persistent weak demand, competition from the falling cost of off-spec virgin plastics and cheaper imports from Asia. The inadequate returns mean it is highly likely that some recyclers may be forced to leave the industry over the coming months.
In September, recycled plastics price movements varied widely between classes. recycled PET food-grade pellet prices plunged €150/tonne while recycled PET colored flake prices increased by €20 per metric tonne. recycled polypropylene and recycled high impact polystyrene prices fell somewhat while recycled high density polyethylene prices increased by €20 per tonne. Recycled low density PE price changes varied between product types.
Recycled plastics price movements continue to vary between product classes in October The cost of all recycled PET grades are falling within a range of €25-40/tonne while recycled PP prices are falling by around €15/tonne. Recycled LDPE and HDPE prices, on the other hand, are gaining around €5-10/tonne. Recycled PS prices remain unchanged from the previous month.
The rise for recycled LDPE, HDPE prices and the stability of PS prices were helped by the increase in the cost of standard material and the ongoing production cutbacks at recycling plants. There has not been any noticeable uptrend in demand this month with many processors unwilling to commit to restocking with prices widely expected to fall further during the rest of the year.
R ecycledPET clear food-grade pellet prices remained under severe pressure in September; plunging by a further €150/tonne. Clear food-grad pellet prices are under pressure from cheaper Asian imports and competition from standard PET. However, given the dramatic decline in recycled PET prices this year, and a small upturn for standard PET prices, the price premium for clear food-grade PET material over standard PE has now narrowed to €250/tonne compared with €850/tonne twelve months ago.
Clear flake prices fell by €40-50/tonne last month while colored flake prices increased by €15-20/tonne, mainly because recyclers managed to push through the higher cost of colored bottle scrap.
While recyclers continued to maintain reduced production rates to minimize stocks, there was more than sufficient material available. Demand remained below normal as buyers assumed further price reductions ahead and therefore only bought enough material for their immediate needs.
In October, recycled PET prices have indeed continued on a downward trend because of low demand and a growing supply of imported material. Clear food-grade pellet prices fell by a further €35/tonne, colored grades fell by €25/tonne and clear flake prices fell by €40/tonne. Recyclers’ variable costs and margins have come under further pressure following a rise in the cost of bottle scrap.
Recycled HDPE prices rallied in September with an increase of €15-20/tonne for both black injection molding and colored blow molding pellets. Recyclers benefited from a slight upturn in the cost of standard HDPE material.
There was sufficient material available despite production curbs remaining in place. Demand remained below expectations.
In October, recycled prices increased by a further €15-20/tonne. The price upturn is being sustained by the higher cost of standard HDPE material and continued production curbs by recyclers.
Recycled LDPE price movements varied during September. Natural film prices remained unchanged, translucent film pellet prices fell €20/tonne while black extrusion pellet prices increased by €10/tonne.
It would appear that the bottom of the price cycle may have been reached. However, demand was insufficient to allow recyclers to factor in the full extent of the increase in scrap film prices.
Recycled LDPE prices have indeed increased slightly this month; by €5-10 per tonne. While demand remains weak and availability of material scrap film has fallen, there was still sufficient material available to fulfl all orders.
In September, recyclers initially asked for price increases of €50/tonne. However, demand was insufficient to justify such an ask and recyclers were forced to concede a price reduction. Both black homopolymer and black copolymer pellet prices fell by €10/tonne.
There was more than enough material to meet demand which has failed to recover after the holiday period.
In October, recycled PP prices decreased by €15 per tonne because of ongoing low demand. Processors are avoiding restocking as further price reductions are expected.
In September, low demand meant that recyclers had to grant price concessions to processors despite facing cost pressure. Black recycled HIPS pellet prices fell by €15-20 per tonne. Stock replenishment failed to live up to expectations after the holidays and recyclers maintained strict output restrictions to avoid excess inventories from developing.
R-HIPS prices remained unchanged in October supported by the higher cost of virgin material. Construction industry demand for recyclate remains disappointingly low.