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 inadequate returns mean it is highly likely that some recyclers may be forced to leave the industry over the coming months.
In September, recycled plastics price movements varied widely between classes. 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 plastics price movements continue to vary between product classes in October The cost of all R-PET grades are falling within a range of €25-40/tonne while R-PP prices are falling by around €15/tonne. R-LDPE and R-HDPE prices, on the other hand, are gaining around €5-10/tonne. R-HIPS prices remain unchanged from the previous month.
The rise for R-LDPE, R-HDPE prices and the stability of R-HIPS prices were helped by the increase in the cost of standard material and the ongoing production cutbacks at recycling plants. There has not been any noticeable uptrend in demand this month with many processors unwilling to commit to restocking with prices widely expected to fall further during the rest of the year.
Recycled polyethylene terephthalate (R-PET)
R-PET clear food-grade pellet prices remained under severe pressure in September; plunging by a further €150/tonne. Clear food-grad pellet prices are under pressure from cheaper Asian imports and competition from standard PET. However, given the dramatic decline in R-PET prices this year, and a small upturn for standard PET prices, the price premium for clear food-grade R-PET material over standard PE has now narrowed to €250/tonne compared with €850/tonne twelve months ago.
Clear flake prices fell by €40-50/tonne last month while coloured flake prices increased by €15-20/tonne, mainly because recyclers managed to push through the higher cost of coloured bottle scrap.
While recyclers continued to maintain reduced production rates to minimise stocks, there was more than sufficient material available. Demand remained below normal as buyers assumed further price reductions ahead and therefore only bought enough material for their immediate needs.
In October, R-PET prices have indeed continued on a downward trend because of low demand and a growing supply of imported material. Clear food-grade pellet prices fell by a further €35/tonne, coloured grades fell by €25/tonne and clear flake prices fell by €40/tonne. Recyclers’ variable costs and margins have come under further pressure following a rise in the cost of bottle scrap.
Recycled high-density polyethylene (R-HDPE)
R-HDPE prices rallied in September with an increase of €15-20/tonne for both black injection moulding and coloured blow moulding pellets. Recyclers benefitted from a slight upturn in the cost of standard HDPE material.
There was sufficient material available despite production curbs remaining in place. Demand remained below expectations.
In October, R-HDPE prices increased by a further €15-20/tonne. The price upturn is being sustained by the higher cost of standard HDPE material and continued production curbs by recyclers.
Recycled low-density polyethylene (R-LDPE)
R-LDPE price movements varied during September. Natural film prices remained unchanged, translucent film pellet prices fell €20/tonne while black extrusion pellet prices increased by €10/tonne.
It would appear that the bottom of the price cycle may have been reached. However, demand was insufficient to allow recyclers to factor in the full extent of the increase in scrap film prices.
R-LDPE prices have indeed increased slightly this month; by €5-10/tonne. While demand remains weak and availability of material scrap film has fallen, there was still sufficient material available to fulfil all orders.
Recycled polypropylene (R-PP)
In September, recyclers initially asked for price increases of €50/tonne. However, demand was insufficient to justify such an ask and recyclers were forced to concede a price reduction. Both black homopolymer and black copolymer pellet prices fell by €10/tonne.
There was more than enough material to meet demand which has failed to recover after the holiday period.
In October, R-PP prices decreased by €15/tonne because of ongoing low demand. Processors are avoiding restocking as further price reductions are expected.
Recycled high-impact polystyrene (R-HIPS)
In September, low demand meant that recyclers had to grant price concessions to processors despite facing cost pressure. Black R-HIPS pellet prices fell by €15-20/tonne. Stock replenishment failed to live up to expectations after the holidays and recyclers maintained strict output restrictions to avoid excess inventories from developing. .
R-HIPS prices remained unchanged in October supported by the higher cost of virgin material. Construction industry demand for recyclate remains disappointingly low.