In June, recycled plastics producers continued to raise prices despite a sizeable reduction in the cost of virgin polymers. While demand for virgin material is dwindling due to the worsening economic climate, recycled plastics prices continue to benefit from rising demand and low imports.
All grades, with the exception of R-PP homopolymers, posted solid price increases last month. It appears that most R-PP homopolymer trades were agreed early in the month and settled lower in line with virgin material.
R-PET prices registered triple-digit gains and recyclers were able to extend their margins as costs increased by only a modest amount. There are however signs of moderating R-PET demand as the price differential between virgin PET and R-PET has widened considerably this year.
R-HIPS prices are benefitting from growing demand as a result of switching by processors in view of sky-high virgin polystyrene prices.
Recycled polyolefin prices are rising due to higher base material costs and good demand. R-LDPE prices increased €50-60/tonne last month, R-HDPE prices increased €30-50/tonne and R-PP copolymer prices were €60/tone higher over the previous month.
There was generally sufficient material available to meet demand despite a low volume of imported material. All product sectors saw good order intake as more customers initiate sustainability programmes and entered the recyclate market. E&E and automotive demand showed signs of an uptick last month.
In July, recycled plastics prices are increasing further as recyclers attempt to pass on higher base material and energy costs. Seasonal processing plant shutdowns for the summer holidays are however curbing demand, and hence, restricting the extent of the planned price hikes.
Recycled polyethylene terephthalate (R-PET)
R-PET producers pushed through triple-digit price hikes in June with limited resistance as a result of the good demand and low supply. As the cost of bottle scrap increased by only €10-20/tonne, profit margins have widened.
R-PET demand is easing as a result of the increasing price differential with virgin material. In June, clear food-grade R-PET pellet prices were €650/tonne higher than virgin PET prices, compared to €270/tonne in January. PET processors are also reducing their orders for recyclate given the worsening economic climate and growing concerns about softening drinks bottle demand.
Clear R-PET flake and clear food-grade pellets were in ample supply although coloured flakes availability shortened.
In July, PET recyclers are expected to achieve a further price premium over the cost increases. However, the planned price rise is likely to be limited by an increasingly more balanced market.
Recycled low-density polyethylene (R-LDPE)
Good demand and rising base material costs led to further price increases for R-LDPE product in June. Natural film grades prices were up by €60/tonne with translucent film pellets and black extrusion pellet prices climbing by €50/tonne.
Demand remains at a solid level with more customers continuing to enter the market. Material availability was sufficient to meet demand although there were reported shortages of high-quality grades.
In July, higher base material and energy costs should lift prices further while processing plant shutdowns for the summer holidays will curtail R-LDPE supply.
Recycled high-density polyethylene (R-HDPE)
In June, R-HDPE prices increased between €30-50/tonne as recyclers were able to pass on higher costs to buyers given the widening gap between virgin material and recyclate prices.
There was sufficient material available to serve regular customers. R-HDPE demand for coloured blow moulding pellets remains solid while demand for black injection moulding pellets from the E&E and automotive sectors is picking up.
In July, R-HDPE prices are expected to rise in line with base material costs.
Recycled polypropylene (R-PP)
In June, R-PP homopolymer pellet prices declined €20/tonne as the cost of virgin material fell. R-PP copolymer prices, on the other hand, posted price increases of €60/tonne.
Demand was good last month and automotive sector orders finally saw an upturn. Customer contracts were fulfilled in most cases, although base material was generally in short supply.
In July, R-PP recyclers will attempt to pass through higher costs, but declining virgin material prices could reduce their chances of success.
Recycled high-impact polystyrene (R-HIPS)
In June, R-HIPS prices surged by €70/tonne as a result of strong demand caused partly by the very high cost and short supply of virgin material. As more customers turned to recycled HIPS, the surging sales meant that demand far exceeded supply.
As the cost of virgin PS continues to rise in July, recyclers will face no resistance to further price hikes.