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Market Reports - Plastics

RTGE Staff January 13, 2014

The plastic scrap market is starting to find some solid footing in Europe. After a sharp correction in early 2013, more recent trends seem to point toward a modest improvement in plastic scrap markets.

For European plastics recyclers, a key reason for the strengthening has been the modest improvement in the European economy. Although still fragile, more recent figures show that the economies of most European countries have turned from a contraction to a modest expansion. While the improvement could still slip back into recessionary mode, for the first time in many quarters, more European economies are in growth mode. This change has resulted in a better than stronger plastic market throughout Europe.

Another reason for the better outlook for a range of plastic scrap grades has been the return to the market of more Asian buyers, including those in China. The introduction of the Green Fence program in China in early 2013 created a chill in the market. Suspect loads of plastics, especially mixed plastics, fell under scrutiny. A number of sources say that even single grade shipments fell under suspicion from Chinese inspectors. As a result, many plastics recyclers opted not to ship to that region.

However, more recently with more European recyclers (as well as recyclers from other regions of the world) getting a better grip on quality specifications, it appears that shipments to China are becoming a bit easier, according to a number of sources. Many exporters have made adjustments to the material they are handling, and China has started to actively seek more plastic scrap.

Meanwhile, China, which has been the driving force, both up and down, for most grades of plastic scrap, has been increasing its prices for a number of plastic scrap grades. During the Bureau of International Recycling (BIR) Autumn Round-Table Sessions, held in late October 2013 in Warsaw, Poland, a number of plastics recyclers noted that demand and prices for plastic grades such as LDPE (low-density polyethylene) and HDPE (high-density polyethylene) started to improve during the middle of 2013 and had remained fairly stable through the rest of the year. One of the few grades that hasn’t benefited from the upswing is PET (polyethylene terephthalate) plastic, which has seen some declines in prices over the past several months.
 


During BIR Autumn Round-Table Sessions. Surendra Borad, the head of BIR’s Plastics Committee, noted, “There will be a substantial increase in exports of sorted plastic scrap and also of reprocessed plastics from Europe to China.”

While transportation costs climbed, Borad said, the improvement in the quality of the plastic scrap would ultimately reduce the price of that material.

While the flow of plastic scrap into China is growing, several exporters say the country is still atmaintain qualith specifications.

With the improving European economies, a number of new facilities and expansion projects are coming online that target various grades of recovered plastic. This strengthening of markets on the continent has given recyclers the confidence that end markets will be available through 2014.

For India, toward the end of 2013, demand for LDPE and film plastic started to slow down in both volume and prices. A key reason for the slump is import restrictions, which have made it more difficult to ship plastics into the country.

In his presentation to BIR conference attendees, Borad also pointed out that there was a recent change in the import/export policy for plastic scrap to India.

This policy, Borad said, was causing some concern for plastic scrap, importers in India, as they “are not prepared to re-export their processed plastics. Apart from global market situation, this is one of the reasons why the volume of import of plastic scrap into India is slowing down,” he said.

Presenting a more bullish tone, attendees of the recent meeting of Plastics Recyclers Europe say plastics recycling will show steady growth over the next several years.

At the Plastics Recyclers Europe Annual Meeting, held Nov. 21-22, 2013, in Amsterdam, Ton Emans, president of the association, said, “The coming years will bring radical changes in the plastics recycling industry. We need measures to create a market for recycled plastics so that the market pulls recyclable plastics out of the landfills. The market barriers restricting the use of recycled plastics should be lifted by the upcoming revision of the European waste legislation.

“The recent public consultations made by the European Commission demonstrate that the European citizens are asking to create sustainable plastics which are recycled at their end-of-life,” he added. “The Commission, Parliament and member states will now have to translate these expectations into efficient legislation.”

The association previously released a study that says a 62% plastics recycling rate is achievable by 2020.

Meanwhile, Germany’s BVSE, the Federal Association for Secondary Raw Materials and Waste Management e.V., has expressed concern that commingling of mixed plastics and foils by manufacturers is degrading the quality of the plastics that will need to be recovered for recycling purposes. To compensate, the BVSE has called for “direct dialogue” between recyclers and the packaging industry.

In the U.K., Closed Loop Recycling, has announced plans to increase its HDPE recycling capacity to meet the U.K. dairy industry’s growing demand for packaging. The company says it is increasing the capacity of its Dagenham, U.K., plant to 55,000 tonnes per year.

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