Troubled times for European recyclers as demand dwindles

The pressure on the European recycling industry is growing as recycled standard thermoplastics prices continued to tumble in July and August. Recycled plastics prices are under severe pressure because of persistent weak demand caused by the economic stagnation throughout Europe and competition from the falling cost of off-spec virgin plastics and cheaper imports from Asia.

Falling virgin material prices are having a major adverse impact on converters’ use of recyclate. Sustainability considerations seem to have now taken a back seat behind economic factors, especially in Central and Eastern Europe. There is also a growing concern in the recycling industry that not all of the large quantities of imported off-spec material from Asia can be classified as meeting European standards for recyclate.

The downward price pressure facing PET remains particularly serious, In July, clear flake prices fell by €130 per metric ton, clear food-grade pellet prices were down by €90 per tonne and colured flake prices fell by €80 per tonne. Recycled high density polyethylene prices fell by €40-50 per tonne, Recycled low density PE natural film and translucent film prices fell by €90 per tonne and Recycled polypropylene prices were €70-80 per tonne lower than in the previous month.

Recycled plastics prices remain under downward pressure during the first two weeks of August. Demand remains very low but supply was more than sufficient despite recyclers curbing production.

Recycled PET once again shows the largest decline in price. Clear flake prices have fallen by €100 per tonne and clear food-grade pellet prices are down by €90 per tonne.

Prices for most other recycled plastics classes are declining at a less steep rate compared to the previous month. Recycled HDPE prices are down €20-30 per tonne compared to a reduction of €40-50 per tonne in July. Recycled LDPE natural film and translucent film pellet prices are down by €20-30 per tonne against €60-90 per tonne last month, and R-PP prices are down by €50-60 per tonne compared to a reduction of €70-80 per tonne in July.

Western Europe: post-consumer recycled polymer prices (in euros per tonne):

Recycled PET

In July, the downtrend for prices gained momentum because of continuing weak demand, the lower cost of bottle scrap, competition from virgin PET and cheaper imported material. Clear flake prices fell by €130 per tonne, clear food-grade pellet prices were down by €90 per tonne and colored flake prices fell by €80 per tonne.

Demand remains extremely low as a result of competition from the falling cost of virgin PET and competitively-priced imports from Asia. Furthermore, the soft drinks sector has failed to increase seasonal demand in line with expectations due to unfavorable weather conditions during the early summer months.

Material availability is more than sufficient despite recyclers continuing to curb production while cheap imported material from Asia have added to the growing supply surplus.

During the first two weeks of August, recycled PET clear flake prices have fallen by €100 per tonne, clear food-grade pellet prices are down by €90 per tonne and colored flake prices are falling by €40 per tonne. Recycled PET Prices remain under pressure because of cheap imports, low demand and competition from primary material.

Recycled HDPE

In July, prices continued to slide because of ongoing demand weakness and competition from off-spec virgin material. Recycled HDPE colored blow molding prices dropped by €50 per tonne with black injection molding prices down by €40 per tonne over the month. Demand remains extremely low with the construction industry in particular failing to recover as expected. Supply is low as recyclers maintain low production rates yet there is still plenty of material to meet demand.

Recycled HDPE prices are falling less steeply during the first two weeks of August compared with the previous month. Colored blow molding pellets prices are down €30 per tonne and black injection molding pellets are €20 per tonne down on average July price settlements.

Recycled LDPE

In July, recycled LDPE prices continued to fall because of ongoing demand weakness and replacement by the lower cost of’ off-spec’ virgin material from post-industrial sources. Natural film prices fell by €90 per tonne, translucent film pellet prices fell by €60/tonne and black extrusion pellet prices were down €20 per tonne.
Recyclers continued with production cutbacks to avoid a build-up of excess stock levels, yet there was still sufficient material availability to meet demand.

Recycled LDPE prices are falling at a lower rate during the first two weeks of August compared with the previous month with natural film and translucent film pellet prices down by €20 euros per tonne and black extrusion pellet prices down by €10 per tonne.

Recycled PP

Prices fell again in July because of low demand, high stocks at recyclers, competition from the lower cost of off-spec virgin material and lower base material costs. Both recycled PP homopolymer and copolymer prices fell on average by €70-80 per tonne.

Recycled PP prices are down by €50-60 per tonne during the first two weeks of August, which represents a less steep decline compared to previous months.

Recycled high-impact polystyrene

Recycled PS prices fell by €20 per tonne in July because of persistently weak demand and plentiful supply.

While recyclers have continued to cut production rates, there is still more than sufficient material available.
Recycled HIPS prices are down by a further €60 per tonne during the first two weeks of August, which represents a steeper decline compared with previous months.