Recyclers under pressure as downward price trend continues

European recycled standard thermoplastics prices declined further in June and the downward price pressure has continued into July. Recycled plastics prices are under severe pressure because of persistent weak demand caused by the economic stagnation throughout Europe and competition from the falling cost of off-spec virgin plastics and cheaper imported recyclate.

At the same time, weak demand has led to a surplus supply situation, despite many recyclers curbing output to limit a build-up of inventories.

The market position for R-PET is particularly perilous. As the cost of virgin PET has fallen by €700/tonne since July 2022 converters have increasingly been switching to using a larger volume of standard material, despite a similar reduction in R-PET prices over the same period. A price war has subsequently developed between R-PET and virgin PET which makes it very difficult to operate the recycling plants economically.

In June, R-PET clear flake prices crashed €150/tonne, clear food-grade pellet prices fell by €100/tonne and coloured flake prices were €50/tonne down on the previous month.

Other recycled plastics classes also continue to suffer from declining prices due to very weak demand, competition from virgin material and lengthening supply.

In June, R-HDPE blow moulding prices declined €50/tonne while injection moulding grades fell by €30/tonne. R-LDPE natural film prices fell €60/tonne with R-LDPE translucent film prices down by €40/tonne. R-PP homopolymer and copolymer prices declined €70/tonne in June with R-HIPS prices €20/tonne lower than in the previous month.

Recycled plastics prices remain under downward pressure during the first two weeks of July. Market fundamentals are unlikely to change significantly this month, although the beginning of the summer holiday season is likely to depress demand even further.

Recycled polyethylene terephthalate (R-PET)
In June, R-PET prices remained under heavy pressure because of continuing weak demand, the lower cost of bottle scrap, competition from virgin PET and cheaper imported material. Clear flake prices fell by €150/tonne, clear food-grade pellet prices were down by €100/tonne and coloured flake prices fell by €50/tonne.
Demand remains extremely low as a result of competition from the falling cost of virgin PET and competitively-priced imports from the Far East. Furthermore, the soft drinks sector has failed to increase seasonal demand in line with expectations due to unfavourable weather conditions during the early summer months.
Material availability is more than sufficient despite recyclers continuing to curb production while imports have added to the growing supply surplus.
In July, R-PET prices are likely to fall further due to continuing low demand and competition form the lower cost of virgin material.

Recycled high-density polyethylene (R-HDPE)
R-HDPE prices continued to slide in June because of ongoing demand weakness and plentiful supply. R-HDPE coloured blow moulding prices dropped by €50/tonne with black injection moulding prices down by €30/tonne over the month. Demand remains extremely low with the construction industry in particular failing to recover as expected. Recyclers have responded by curbing output even more to avoid a further build-up of stocks.
In July, R-HDPE prices are expected to fall again as the start of the holiday season puts additional downward pressure on demand. 

Recycled low-density polyethylene (R-LDPE)
In June, R-LDPE prices continued on a downward trend. R-LDPE natural film prices fell by €60/tonne, translucent film prices fell by €40/tonne and black extrusion pellet prices were down €10/tonne.
R-LDPE film prices were adversely impacted by ongoing demand weakness and continued replacement by the lower cost of 'off-spec’ virgin material from post-industrial sources. Recyclers are implementing even harsher production cutbacks to avoid a build-up of excess stock levels. Yet, the availability of base material and recyclate continues to exceed demand.
The downward price trend continues into July with demand adversely impacted even further by the holiday season.

Recycled polypropylene (R-PP)
In June, R-PP prices fell again because of low demand, high stocks at recyclers, competition from the lower cost of off-spec virgin material and lower base material costs. Both R-PP homopolymer and copolymer prices fell on average by €70/tonne with some recyclers granting triple-digit price concessions in order to shift excess stock.
In July, R-PP prices are falling further as the start of the holiday season exerts additional downward pressure on demand. 

Recycled high-impact polystyrene (R-HIPS)
R-HIPS prices fell by €20/tonne in June because of persistent weak demand and plentiful supply. While recyclers have continued to cut production rates, there is still more than sufficient material available.
In July, R-HIPS prices are down a little as the rising cost of base material limits the scope for larger price discounts.