Improving Prices

Markets for most grades of plastic scrap are holding up fairly well over the first quarter of 2012. Despite some positive sentiment being expressed by a host of European-based plastics recyclers, there are some darker clouds looming on the horizon.

One of the biggest concerns for many plastics recyclers is the significant role China is playing in the market. Several consumers of scrap plastics have said they are being shut out of the market for some plastic grades. PET plastics appear to be the one grade that has remained in abundance in Europe.

Over the past several months several European organizations have expressed concern over the growth in the export of scrap plastics from Europe to China. Despite these protestations, there are no apparent short-term signs of any legislative efforts to rein in the flow of material to China.

With China growing as an outlet for scrap plastics from Europe, quality issues are becoming a bigger issue. Several scrap plastics recyclers note that China has become more vigilant with the scrap plastics shipments entering the country, especially into northern ports. While inspections are more aggressively going after many shipments, a number of plastic scrap exporters are shifting their ports of call in China to sites in the south where inspections are not as tight. The result, according to several plastics recyclers, is that cleaner loads of plastic are being moved to northern ports.

Going forward, a challenge to the plastic scrap market could be mixed loads. This grade is coming under greater scrutiny due to suspect quality issues. CCIC, the inspection agency, is becoming more vigilant in regards to what it allows into the country.

China is not the only country that has been cracking down on suspect loads. In Indonesia, the customs agencies have reportedly confiscated more than 100 containers due to the inconsistent nature of the shipments.

While southern China has been the port of choice for lower grades of plastic, the costs to ship into that region also are climbing, a number of recyclers say. Several scrap plastics exporters say shipping into Hong Kong is becoming cost prohibitive, which may create problems as China perhaps becomes a more costly end market for low grades of plastic scrap.

A challenge for some European plastics recyclers has been the ability of brokers from China to outbid for material.

One grade that has been steadily gaining in popularity to Asian sources is LDPE plastic. One plastics recycler in Northern Europe estimates that he is shipping close to 100 percent of the film plastic he takes in to China and other Asian sources. PET plastic, meanwhile, stays at European sources.

Another source says that LDPE prices have jumped significantly during late February and early March. Further, he adds that most grades of scrap plastic, with the exception of PET plastic, are increasing in price and demand. He attributes the price increase to the increase in prices for both oil and prime plastic.

Along with China, the plastics exporter adds that Vietnam is becoming a growing end market for LDPE, although the buyers in that country are requiring a much cleaner grade of scrap plastic. India has become a fairly healthy end market for LDPE, a European plastics recycler says. “Indian markets are quite good,” he notes.