Surging primary material costs adds to recycled resins pricing in Europe

In March, recyclers in Europe attempted to impose massive price premiums as a result of rising material and production costs, high demand and tightening availability. However, suppliers were only able to push through a fraction of the targeted price premiums due to buyer resistance. Nevertheless, most recycled polymer classes registered triple-digit price gains last month.

In April, recycled polymer prices have continued to rise, but to a much smaller extent. Recycled low density polyethylene film showed the highest increase with prices rising by €90 per metric ton. Most other classes and types saw gains of between €30-50/tonne. The sharply rising cost of primary material supported recyclers’ push for higher prices.

Higher virgin polymer prices and shortening availability also led to more converters seeking alternative supply in the form of recycled material. Recycled plastics demand was particularly robust across the consumer goods sector driven by brand owners’ sustainability programs.

There was sufficient material across most recycled plastics classes and types in April to fully meet demand from regular customers, although it was harder to find additional volumes required to serve new customers. High-quality material was, however, in shorter supply.

In May, strong demand and the rising cost of energy and production scrap will likely lead to a further round of price increases. The availability of high-quality production scrap and bottle scrap remains a major concern for recyclers.

Clear food-grade pellets and clear flake saw price increases of €50/tonne in April with colored flake prices rising by €30/tonne. Rising virgin PET prices and bottle scrap costs supported recyclers calls for higher R-PET prices.

PET bottle scrap, particularly for high-quality grades, was in short supply with bottlenecks and delays in logistics also adding to transportation costs.

Demand returned to more normal levels in April following the hectic buying spree seen in the previous month.

Recycled LDPE

In April, recyclers were able to raise recycled LDPE prices without much discussion aided partially by the sharp increase in virgin LDPE prices. Natural film grades posted a price rise of €90/tonne with other grades rising by €30-50/tonne.

There was sufficient availability of recycled LDPE to meet demand although high quality grades were in shorter supply and were more expensive.

Recycled LDPE demand was supported by converters switching from primary material to recyclate due to the sharply rising cost of primary LDPE.

Recycled high density polyethylene

In April, recycled high density PE prices increased by €50/tonne with recyclers able to push through gains without much resistance due to material shortages and sharply rising prices for primary material.

There was sufficient material available to serve regular customers although high-quality grades were in shorter supply and more expensive.

R-HDPE demand for consumer goods and construction applications was robust, while sales of black injection molding material to the automotive sector slowed compared to the previous month.

Recycled polypropylene (R-PP)

R-PP prices increases slowed considerably compared to the previous month with gains of €25/tonne for homopolymer pellets and €50/tonne for copolymer pellets. Sufficient production scrap was available to serve the needs of regular customers. R-PP demand was supported by the sharply rising cost of primary material and by automotive producers topping up inventories.

Recycled high-impact polystyrene (R-HIPS)

In April, R-HIPS prices increased by €50/tonne aided by the sharply rising cost of primary material. R-HIPS sales increased as buyers of standard polystyrene switched, where possible, to R-HIPS, as primary HIPS has become very expensive and is in short supply. There was sufficient material available to serve regular customers but orders from new customers were often subject to allocation.