The European recycling industry has, for the most part, continued to suffer from falling prices and profitability during the last two months. Recycled plastics prices are under severe pressure because of persistent weak demand, competition from the falling cost of off-spec virgin plastics and cheaper imports from Asia.
The falling cost of virgin material relative to recycled plastics is taking its toll on the recycling industry. The downward price pressure facing R-PET remains particularly problematic as converters increasingly opt for cheaper virgin material rather than R-PET. Since early 2019, clear R-PET pellet prices have consistently higher than virgin PET. However, the price differential between clear food-grade R-PET pellets and virgin PET has narrowed over the last twelve months from a peak of €850/tonne in September 2022 to €270/tonne in September 2023.
R-PET once again saw the largest price decline during August. R-PET clear flake prices fell by €100/tonne and clear food-grade pellet prices are down by €90/tonne.
Other classes of recycled plastics posted less steep price reductions in August compared to the previous month. R-HDPE prices fell €20-30/tonne compared to a reduction of €40-50/tonne in July. R-LDPE natural film and translucent film pellet prices dropped by €20-30-tonne against €60-90/tonne in the previous month. R-PP prices fell by €50-60/tonne against a reduction of €70-80/tonne in July.
Recycled plastics price movements varied widely between classes during the first two weeks of September. R-PET food-grade pellet prices plunged €150/tonne while R-PET coloured flake prices increased by €20/tonne. R-PP and R-HIPS prices fell somewhat while R-HDPE prices increased by €20/tonne. R-LDPE price changes varied between product types.
Recycled polyethylene terephthalate (R-PET)
In August, R-PET clear flake prices fell €100/tonne, clear food-grade pellet prices were down by €90/tonne and coloured flake prices fell by €40/tonne. R-PET prices remain under pressure because of the falling cost of bottle scrap, cheap Asian imports, low demand and competition from primary material.
Demand remained under pressure because of competition from the falling cost of primary PET and competitively-priced imports from the Far East. Furthermore, the beverages industry failed to increase seasonal demand in line with expectations. Material availability is more than sufficient despite recyclers continuing to curb production while low-cost material from Asia has added to more than adequate supply.
R-PET prices remained under pressure during the first two weeks of September. Clear food-grade pellet prices plunged by a further €150/tonne and clear flake prices fell by €40-50/tonne. Coloured flake prices, on the other hand, increased by €15-20/tonne.
Recycled high-density polyethylene (R-HDPE)
In August, R-HDPE prices fell less steeply compared to the previous month. Coloured blow moulding pellets prices fell €30/tonne and black injection moulding pellets were €20/tonne down compared to closing contract settlements in the previous month.
Demand remains extremely low with the construction industry in particular failing to recover as expected. Recyclers have maintained low production rates yet there is still plenty of material to meet demand.
R-HDPE prices rallied during the first two weeks of September with an increase of €20/tonne for both black injection moulding and coloured blow moulding pellets.
Recycled low-density polyethylene (R-LDPE)
Recyclers failed to stabilise prices in August and had to grant further small concessions. Natural film and translucent film pellet prices were down by €20//tonne and black extrusion pellet prices down by €10/tonne. Recyclers continued with production cutbacks to avoid a build-up of excess stock levels, yet there was still sufficient material availability to fulfil orders. Demand remained very low due to the summer holidays yet there was some evidence of pre-buying by converters.
R-LDPE price movements varied during the first two weeks of September. Natural film prices remained unchanged, translucent film pellet prices fell €20/tonne while black extrusion pellet prices increased by €10/tonne.
Recycled polypropylene (R-PP)
R-PP prices declined €50-60/tonne during August, which represents a less steep decline compared to the previous month. Recyclers were forced to grant sizeable price concessions because of competition from low-priced off-spec primary material and low volume calls. Demand remained at a very low level because of subdued consumer spending and the impact of the holiday season. There was more than enough material despite recyclers continuing to throttle production.
Black homopolymer and black copolymer pellet prices fell by €10/tonne during the first two weeks of September.
Recycled high-impact polystyrene (R-HIPS)
In August, recyclers were prepared to meet buyers demand for much lower prices in order to maintain sales volume. R-HIPS prices were down by €60/tonne during August, which represents a steeper decline compared to previous months. There was more than enough material to meet volume calls despite recyclers continuing to restrict production. Demand remained very subdued during the holiday season.
R-HIPS prices fell by €20/tonne during the first two weeks of September.