The European recycling industry has mostly 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 and cheaper imports from Asia. Inadequate margins being earned mean the European recycling industry may likely be forced to consolidate further over the coming months.
On a more positive note, the rising cost of virgin material has boosted R-PE and stabilised R-HIPS prices; R-PET and R-PP prices have continued to fall.
In October, recycled plastics price movements continued to vary between product classes R-PET grades fell within the range of €25-40/tonne while R-PP prices dropped by around €15/tonne. R-LDPE and R-HDPE prices, on the other hand, gain around €5-10/tonne. R-HIPS prices remain unchanged from the previous month.
Recycled standard thermoplastic prices seem unlikely to change very much during November. Small price increases should again be possible for R-PE, while R-PET and R-PP prices look likely to fall further. There is unlikely to be any noticeable demand upturn this month with many processors unwilling to commit to restocking with R-PET prices, in particular, widely expected to fall further during the rest of the year.
The competitive position of recycled standard thermoplastics vis-à-vis virgin material has improved in recent months as virgin plastics prices have risen while recyclate plastics prices have fallen. This month, however, standard thermoplastics prices are likely to rise following an increase in the cost of raw materials.
Recycled polyethylene terephthalate (R-PET)
In October, R-PET prices 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.
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.
R-PET prices have remained under pressure during the first week in November. Supply is still on the long side and demand is not yet improving.
The competitive position of R-PET continues to improve vis-à-vis virgin PET material as standard PE prices rise and R-PET prices fall. The price differential between clear R-PET and standard PET has narrowed from €420/tonne in August to €185/tonne in Octobe. The price premium for standard PET versus R-PET clear flake has risen from €80/tonne in August to €280/tonne in October.
Recycled high-density polyethylene (R-HDPE)
In October, R-HDPE prices increased by a further €15-20/tonne, following from a similar price increase in the previous month. The price upturn is being sustained by the higher cost of standard HDPE material and continued production curbs by recyclers. While demand remained weak compared to previous years, there was a small improvement in demand as some processors replenished stocks.
In November, R-HDPE prices appeared to be on course for further price gains. Recyclers were pushing for small price increase during the first week of the month in a well-balanced market.
Recycled low-density polyethylene (R-LDPE)
In October, R-LDPE prices wedged higher yet weak demand meant that recyclers were unable to pass through in full the increase in cost of scrap material. R-LDPE natural and translucent material prices increased by €10/tonne with black extrusion grade prices rising by €5/tonne. While demand remained weak and availability of material scrap film declined, there was still sufficient material available to fulfil all orders.
R-LDPE prices saw little movement during the first week in November. There was no observable change in the demand position and material availability remained more than adequate.
Recycled polypropylene (R-PP)
In October, R-PP prices decreased by €15/tonne because of ongoing low demand. Processors are avoiding restocking as further price reductions are expected in November. There was more than enough material to meet demand which has failed to recover after the holiday period.
R-PP prices are set to decline further during November. There was still plenty of material available while demand remained very disappointing. P=Many processers were sitting on their hands waiting for prices to fall further before entering the market.
Recycled high-impact polystyrene (R-HIPS)
R-HIPS prices remained unchanged in October supported by the higher cost of virgin material. Construction industry demand for recyclate remains disappointingly low. Stock replenishment failed to live up to expectations and recyclers maintained strict output restrictions to avoid excess inventories from developing.
R-HIPS prices were largely unchanged during the first week in November in a well-balanced market.