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.