Plastic Scrap

PLASTIC>>EUROPE>> Surendra Kumar Borad, Gemini Corp.

There was a lot less activity in European plastic scrap trading at the end of December until the first week of January, as almost all suppliers and collection centers were closed for the Christmas and New Year’s period. Due to these holidays and the sudden shutdown of the cracker facilities, prime material was in shortage. In contrast, demand from Asia was very high and crude oil prices were also firm during this period. These circumstances led to a rise in price of prime plastic which was up 15% to 20% compared with prices at the end of December. With strong prices in prime plastic, the plastic scrap prices rose substantially by 10% to 15% in January.

Since the second week of January the trading activity in plastic scrap has risen substantially and trade has been busy ever since, despite the availability of plastic scrap being very tight. In the first and second weeks of January, due to weather conditions, the movement of plastic scrap was also hampered and collection centers were not able to collect plastic. Due to continuing price rises in plastic scrap and less availability in the market, a lot of suppliers were holding their sales to wait for higher selling prices.

Since the end of December 2009 there has been a rise in prime material prices, and by the end of January many customers started to hesitate in purchasing at these higher prices and instead adopted a wait-and-see strategy. At the time of writing this report, near the end of January, there seems to have been some correction in prime prices, with prices going down slightly. Therefore, buyers of plastic scrap are also expecting prices to come down slightly in the coming weeks.  

Surendra Borad can be contacted at sk@geminicorp.be.