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 falling cost of virgin material relative to recycled plastics is taking its toll on the recycling industry. The downward price pressure facing recycled PET remains particularly problematic as converters increasingly opt for cheaper virgin material rather than the recycled resin. Since early 2019, clear recycled PET pellet prices have consistently higher than virgin PET. However, the price differential between clear food-grade recycled pellets and virgin PET has narrowed over the last twelve months from a peak of €850 per metric ton in September 2022 to €270 per tonne in September 2023.
Recycled PET once again saw the largest price decline during August. Clear flake prices fell by €100 per tonne and clear food-grade pellet prices are down by €90 per tonne.
Other classes of recycled plastics posted less steep price reductions in August compared to the previous month. Recycled high density polyethylene prices fell €20-30 per tonne compared with a reduction of €40-50 per tonne in July. Recycled low density PE natural film and translucent film pellet prices dropped by €20-30 per tonne against €60-90 per tonne in the previous month. Recycled polypropylene prices fell by €50-60 per tonne against a reduction of €70-80 per tonne in July.
Recycled plastics price movements varied widely between classes during the first two weeks of September. Recycled PET food-grade pellet prices plunged €150 per tonne while colored flake prices increased by €20 per tonne. Recycled PP and high impact polystyrene prices fell somewhat while recycled HDPE prices increased by €20 per tonne. Recycled LDPE price changes varied between product types.
In August, recycled clear flake prices fell €100 per tonne, clear food-grade pellet prices were down by €90 per tonne and colored flake prices fell by €40 per tonne. Recycled PET prices remain under pressure because of the falling cost of bottle scrap, cheap Asian imports, low demand and competition from primary material.
Demand remained under pressure because of competition from the falling cost of primary PET and competitively-priced imports from the Far East. Furthermore, the beverages industry failed to increase seasonal demand in line with expectations. Material availability is more than sufficient despite recyclers continuing to curb production while low-cost material from Asia has added to more than adequate supply.
Recycled resin prices remained under pressure during the first two weeks of September. Clear food-grade pellet prices plunged by a further €150 per tonne and clear flake prices fell by €40-50 per tonne. Colured flake prices, on the other hand, increased by €15-20 per tonne.
In August, recycled HDPE prices fell less steeply compared to the previous month. Colored blow molding pellets prices fell €30 per tonne and black injection molding pellets were €20 per tonne down compared with closing contract settlements in the previous month.
Demand remains extremely low with the construction industry in particular failing to recover as expected. Recyclers have maintained low production rates yet there is still plenty of material to meet demand.
Recycled HDPE prices rallied during the first two weeks of September with an increase of €20 per tonne for both black injection molding and colored blow molding pellets.
Recyclers failed to stabilize prices in August and had to grant further small concessions. Natural film and translucent film pellet prices were down by €20 per tonne and black extrusion pellet prices down by €10 per tonne. Recyclers continued with production cutbacks to avoid a build-up of excess stock levels, yet there was still sufficient material availability to fulfill orders. Demand remained very low due to the summer holidays yet there was some evidence of pre-buying by converters.
Price movements varied during the first two weeks of September. Natural film prices remained unchanged, translucent film pellet prices fell €20 per tonne while black extrusion pellet prices increased by €10 per tonne.
Recycled PP prices declined €50-60 per tonne during August, which represents a less steep decline compared to the previous month. Recyclers were forced to grant sizable price concessions because of competition from low-priced off-spec primary material and low volume calls.
Demand remained at a very low level because of subdued consumer spending and the impact of the holiday season. There was more than enough material despite recyclers continuing to throttle production.
Black homopolymer and black copolymer pellet prices fell by €10 per tonne during the first two weeks of September.
In August, recyclers were prepared to meet buyers demand for much lower prices in order to maintain sales volume. Prices were down by €60 per tonne during August, which represents a steeper decline compared with previous months. There was more than enough material to meet volume calls despite recyclers continuing to restrict production. Demand remained very subdued during the holiday season. Prices fell by €20 per tonne during the first two weeks of September.