Lower output slowing downward price trend

Recycled plastic prices fell across the board during October. The economic downturn and fear of a recession have severely weakened demand. In addition, as the cost of virgin polymers have tumbled in recent months, some converters and brand owners have elected to switch from recyclate to lower-priced virgin material for products where sustainability is not a key selling point.

In view of the weak demand and falling prices, recyclers have been unable to pass through higher energy costs onto converters. As a result, the profitability of plastics recycling has been undermined. Recyclers are responding by either taking an unprofitable line out of production or by completely shutting down recycling facilities.

The cutbacks in production have so far been insufficient to stabilise recycled plastics prices due to the very weak demand. Hence, material availability has been sufficient to meet overall demand over the last two months.

In October, R-PET clear flake and clear food-grade pellet prices fell by €70-80/tonne. R-PET coloured flake prices, where demand has been more resilient, fell by only €30/tonne. R-LDPE film and R-HDPE injection moulding pellet prices dropped by €60/tonne. R-PP prices were down by €60/tonne and R-HIPS prices fell by €30/tonne.

Weak end-user demand and further switching by consumer goods producers from recycled to lower-priced virgin material was piling further downward pressure onto recycled plastic prices during the first week of November. To achieve better market balance and restore price stability, more recyclers are either reducing production or considering a complete plant shutdown.

Recycled polyethylene terephthalate (R-PET)
R-PET prices have been quite resilient to the impact of declining demand in recent months but succumbed to lower sales in October. Last month, the price decline for clear R-PET pellets and clear flake materials gathered pace with price rebates of around €70-80/tonne. Coloured flake prices, where demand held up better, fell by only €20-30/tonne. Purchase prices for clear bottle scrap declined by €40-50/tonne while purchase prices for coloured bottle scrap declined by only €30/tonne.

R-PET demand was low at the start of the off-season for the beverage industry. Overall, production was sufficient to cover contracted volumes despite some production cutbacks.

R-PET prices are declining further in November despite high energy costs and dwindling supply. 

Recycled low-density polyethylene (R-LDPE)
R-LDPE prices continued to decline in October due to persistent weak demand and competition from lower-priced virgin material. As a result, recyclers were unable to pass through higher energy costs.
As profitability has been squeezed even further, a number of recyclers have either reduced production or shut down facilities altogether.
Demand has fallen as a result of growing economic woes and some converters switching to lower-priced virgin material.
In November, R-LDPE prices are falling further as production cutbacks are unable to fully offset the weak demand. 

Recycled high-density polyethylene (R-HDPE)
In October, low demand and growing competition from falling standard HDPE prices contributed to a further fall in R-HDPE prices. Coloured blow moulding pellet prices were €80/tonne down on September with black injection moulding pellet prices down by €60/tonne.
Recession fears are weighing heavily on demand for recyclate from the consumer goods and E&E industries. Recyclers are adjusting their output accordingly.
R-HDPE prices continued to decline in early November due to ongoing demand weakness and a growing incentive for converters to switch to less expensive virgin material. 

Recycled polypropylene (R-PP)
R-PP prices declined further during October as a result of weak demand and competition from lower-priced imported standard PP. Both black homopolymer and black copolymer R-PP prices fell by €60/tonne. Suppliers have cut production to achieve a more balanced market.
In early November, R-PP prices continued to fall, although at a less rapid rate. Automotive sector demand for R-PP is apparently on the uptick.

Recycled high-impact polystyrene (R-HIPS)
In October, R-HIPS prices dropped on average by a further €40/tonne as a result of continued demand weakness and growing competition from the falling standard HIPS prices. In November, recyclers plan to reduce production more to keep in step with lower demand.
R-HIPS prices are declining at a slightly reduced pace early November as production cutbacks appear to be restricting the price downturn.