European recycled resin prices fall further as low demand persists

In April, European recycled standard thermoplastic prices continued to drift lower, although at a slower rate than in the previous month. Low incoming orders remains the major drag on prices along with competition from the falling cost of virgin materials.

Recycled PET prices saw the steepest price reduction in April with clear flake prices down by €100 per metric ton over March levels; food-grade pellets and colored flake prices fell €50/tonne. Recycled low density polyethylene prices fell by €10-20 per tonne while recycled high density PE prices were either unchanged or increased by up to €10 per tonne. Recycled polypropylene prices were also unchanged while recycled high impact polystyrene prices softened by around €20 per tonne.

Standard recyclate prices continued to drift downward in May as a result of ongoing weak demand and competition from off-spec virgin material and imports. Price movements did however vary quite considerably. Recycled PET clear flake prices once again saw a triple-digit drop; other recycled PET grades also registered large price declines. Most other categories saw price reductions of between €10-40 per tonne. Recycled LDPE extrusion black prices were unchanged.

Low demand continues to characterize the market for recycled plastics with order activity well below what would normally be expected for the time of year. Demand weakness can be easily explained by the slowdown in European economies and weakness in key end use markets for recyclate such as construction and packaging. Recyclate is also facing growing competition from the falling cost of off-spec virgin material and competition from cheaper imported material from the Far East.

Recyclers have continued to curb output to avoid a build-up of excess stocks; yet there has been no major shortage of material reported.

In June, standard recyclate prices are likely to fall further but at a slower rate. There is some hope that the early signs of a revival in demand may become more widespread by next month.

Recycled PET
In April, recycled PET clear flake prices fell by €100 per tonne with clear food-grade pellet and colored flake prices down by €50 per tonne. Prices have fallen because of the availability of competitively-priced imports from Vietnam and substitution by the less expensive off-spec virgin material. In addition, the cost of clear and colored bottle scrap has fallen across Europe.

While producers continue to curb production rates supply was more than sufficient in April to meet demand because of the additional imports from Asia. While seasonal demand from the beverages sector is growing, processors are increasingly turning to cheaper imports from Asia or using the virgin PET material.

In May, prices have softened further as a result of continuing weak demand and competition from cheaper imported material. Clear flake prices have fallen by €100 per tonne, clear food-grade pellet prices are down by €80 per tonne and colored flake prices have fallen by €50 per tonne.

Recycled LDPE
Recycled HDPE prices continued their downward drift in April, although at a slower rate than in the previous month. Natural film and translucent film pellet prices fell by just €10-20 per tonne; black extrusion pellet prices remained unchanged.  

Recyclers are maintaining production controls to avoid an excess stock position, yet availability of base material and recyclate still exceeds demand. While demand overall remained lower than expected in April, there was a notable improvement in orders for black extrusion pellets and dark film grades.

In May, recycled LDPE film prices fell by €40 per tonne with black extrusion pellet prices once again unchanged. Film demand and prices were adversely impacted by continued replacement by lower cost, off-spec virgin material from post-industrial sources.

 Recycled HDPE
In April, recycled HDPE colored blow molding pellet and black injection molding pellet prices were largely unchanged in a more balanced market. Demand remained at a low level with few firm signs of a seasonal upswing. The Easter break further dampened demand at the beginning of the month. Recycling lines were running at reduced rates to avoid a build-up of excess stock, yet there was still more than enough material to meet demand.

In May, recycled HDPE blow molding prices declined by €30 per tonne while injection molding grades fell by €10 per tonne. Demand failed to recover as expected and the large number of public holidays throughout Europe in May further dampened demand.

Recycled PP
Recycled PP prices remained stable in April in quite a well-balanced market. Demand picked up in April, especially from Eastern Europe; but the Easter break dampened demand at the beginning of the month. Recyclers have raised output in line with the higher demand and their stock levels have increased.

In May, prices fell by €20-30 per tonne because of competition from the lower cost of off-spec virgin material and lower base material costs. Automotive sector demand improved slightly compared to the previous month.

Recycled PS
In April, recycled PS prices fell by €20 [er tonne as demand slackened. Demand returned to levels far below what would normally be expected for the season and recyclers curbed output to avoid an excess supply position. Prices fell by a further €20 per tone in May due largely to continued weak demand.