Troubled times for recyclers as demand dwindles

The pressure on the European recycling industry is growing as recycled standard thermoplastics prices continued to tumble in July and August. 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 imports of Asian material.

Falling virgin material prices are having a major adverse impact on converters’ use of recyclate. Sustainability considerations seem to have now taken a back seat behind economic factors, especially in Central & Eastern Europe. There is also a growing concern in the recycling industry that not all of the large quantities of imported off-spec material from Asia can be classified as meeting European standards for recyclate.

The downward price pressure facing PET remains particularly serious, In July, clear flake prices fell by €130/tonne, clear food-grade pellet prices were down by €90/tonne and coloured flake prices fell by €80/tonne. R-HDPE prices fell by €40-50/tonne, R-LDPE natural film and translucent film prices fell by €90/tonne and R-PP prices were €70-80/tonne lower than in the previous month.

Recycled plastics prices remain under downward pressure during the first two weeks of August. Demand remains very low but supply was more than sufficient despite recyclers curbing production.

R-PET once again shows the largest decline in price; R-PET clear flake prices have fallen by €100/tonne and clear food-grade pellet prices are down by €90/tonne.

Prices for most other recycled plastics classes are declining at a less steep rate compared to the previous month. R-HDPE prices are down €20-30/tonne compared to a reduction of €40-50/tonne in July. R-LDPE natural film and translucent film pellet prices are down by €20-30-tonne against €60-90/tonne last month, and R-PP prices are down by €50-60/tonne compared to a reduction of €70-80/tonne in July.

Western Europe: post-consumer recycled polymer prices (€/tonne)

Recycled polyethylene terephthalate (R-PET)
In July, the downtrend for R-PET prices gained momentum because of continuing weak demand, the lower cost of bottle scrap, competition from virgin PET and cheaper imported material. Clear flake prices fell by €130/tonne, clear food-grade pellet prices were down by €90/tonne and coloured flake prices fell by €80/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 cheap imported material from Asia have added to the growing supply surplus.
During the first two weeks of August, R-PET clear flake prices have fallen by €100/tonne, clear food-grade pellet prices are down by €90/tonne and coloured flake prices are falling by €40/tonne. R-PET Prices remain under pressure because of cheap imports, low demand and competition from primary material.

Recycled high-density polyethylene (R-HDPE)
In July, R-HDPE prices continued to slide because of ongoing demand weakness and competition from off-spec virgin material. R-HDPE coloured blow moulding prices dropped by €50/tonne with black injection moulding prices down by €40/tonne over the month. Demand remains extremely low with the construction industry in particular failing to recover as expected. Supply is low as recyclers maintain low production rates yet there is still plenty of material to meet demand.
R-HDPE prices are falling less steeply during the first two weeks of August compared to the previous month. Coloured blow moulding pellets prices are down €30/tonne and black injection moulding pellets are €20/tonne down on average July price settlements.

Recycled low-density polyethylene (R-LDPE)
In July, R-LDPE prices continued to fall because of ongoing demand weakness and replacement by the lower cost of’ off-spec’ virgin material from post-industrial sources. R-LDPE natural film prices fell by €90/tonne, translucent film pellet prices fell by €60/tonne and black extrusion pellet prices were down €20/tonne.
Recyclers continued with production cutbacks to avoid a build-up of excess stock levels, yet there was still sufficient material availability to meet demand.
R-LDPE prices are falling at a lower rate during the first two weeks of August compared to the previous month with natural film and translucent film pellet prices down by €20//tonne and black extrusion pellet prices down by €10/tonne.

Recycled polypropylene (R-PP)
In July, 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 €70-80/tonne. .
R-PP prices are down by €50-60/tonne during the first two weeks of August, which represents a less steep decline compared to previous months.

Recycled high-impact polystyrene (R-HIPS)
R-HIPS prices fell by €20/tonne in July because of persistently weak demand and plentiful supply. While recyclers have continued to cut production rates, there is still more than sufficient material available.
R-HIPS prices are down by a further €60/tonne during the first two weeks of August, which represents a steeper decline compared to previous months.