The European recycled plastics market is under severe pressure because of extremely low demand and lengthening supply. While some recycling plants have been shut down, most others are operating at reduced rates in order to avoid excess stocks from developing. However, weak levels of demand mean that recyclers’ stock levels are steadily rising.
This situation applies to all recycled plastics sectors, but the situation is particularly precarious for PET recyclers where a fierce price war between R-PET and virgin PET means that it is very difficult to operate the recycling plants economically.
Despite a severe price reduction of €250/tonne for clear flake material and a fall of €200/tonne for clear food-grade pellets since the beginning of May, converters are increasingly switching to virgin PET where prices have tumbled in recent months. In mid-June, virgin PET prices were trading at €1150-1200/tonne compared to €1670-1880/tonne for clear food-grade pellets and €1140-1300/tonne for clear flake.
European R-PET recyclers have also expressed concern about the record high levels of competitively-priced imported material, which has diverted demand way from locally-produced recyclate.
Other recycled plastics materials are also under downward price pressure due to very weak demand, competition from virgin material and lengthening supply.
R-HDPE blow moulding prices have declined by a total of €80/tonne since the beginning of May while injection moulding grades fell by €40/tonne over the same period. R-LDPE natural film prices have fallen by €60/tonne over the last two months, with R-LDPE translucent film prices down by €80/tonne. R-PP prices have fallen by €90-100/tonne since the beginning of May and R-HIPS prices are down €40/tonne during the same period.
In July, recycled plastics prices are likely to remain under downward pressure as the beginning of the summer holiday season also weighs heavily on demand.