BIR reports note continued struggles for recycled resin markets

According to plastics reports filed by board members of the Brussels-based Bureau of International Recycling (BIR) for the winter season, a global wave of cheap virgin resin has continued to harm demand for its recycled counterparts.

Adding to the trouble in the United States, tariffs have not delivered the market relief some in the industry had anticipated, writes board member Sally Houghton of The Plastic Recycling Corp. of California. Combined with low oil prices that have driven down virgin resin costs, a “devastating impact” has been felt by recycled materials markets.

RELATED: A ‘pivotal moment’ for recycled PET

Houghton writes that polyethylene terephthalate (PET) markets remain flat, and reclaimers are continuing to purchase because bale prices are “extremely low,” then are moving material out at similarly depressed prices to avoid a buildup of inventory.

While Mexico has purchased bales on a spot basis, Houghton writes that Mexican buyers have not resumed consistent purchasing from the U.S. At the same time, Southeast Asia also is buying very little material. Domestically, East Coast buyers largely are out of the West Coast market due to falling bale prices and high freight costs.

“There is some movement in the market, but volumes remain well below normal,” Houghton says. “Significant supply is building in the domestic market following reclaimer line and business closures which have further weakened pricing.”

While she says PET’s near-term outlook remains weak, there is hope for improvement beginning in April, though “current indicators point towards another challenging year for the recycled PET market.”

Houghton reports that a wide price gap remains between bales of natural and mixed-color high-density polyethylene (HDPE), with natural priced between 47-50 cents per pound because of seasonal supply tightness and mixed-color sitting at around 7 cents per pound amid weak demand. Low-density polyethylene (LDPE) markets also have weakened, she says, with pricing dropping from around 21 cents per pound to 12 cents per pound, largely due to plastic bag bans in California that have reduced material flows and disrupted end market demand.

“Compounding the issue, the absence of recycled content mandates has allowed manufacturers to shift back towards a lower-cost virgin resin, further limiting demand for recycled LDPE,” she writes.

That switch to lower-cost virgin and a growth in imports also have affected the recycled polypropylene (PP) market, where bales have traded for 5-6 cents per pound.

“In the absence of a major shift, the industry is unlikely to see improvement without government legislative intervention such as stronger recycled content requirements or market support measures, or a sustained increase in oil prices that would narrow the cost gap between virgin and recycled resin,” Houghton writes.

Looking abroad

In his report for Asia and Eastern Europe, board member Max Craipeau of Hong Kong-based Greencore Resources Ltd. notes that a “reset” in Southeast Asian recycled PET (rPET) prices—a 30 percent drop year on year—has crushed margins across bales, flakes and pellets.

Regarding Europe, he says a wave of facility shutdowns is “very real,” but mostly not affecting PET. Of the approximately 1 million tons of annual recycling capacity lost in the last three years, he claims 80-90 percent of closures were not related to PET.

“The rPET cross-border trade is being scapegoated,” he writes. “In 2025, extra-European PET flake and pellet imports were equivalent to much less than 10 percent of Europe’s installed PET recycling capacity. At the same time, they are needed by many recyclers and converters to bridge feedstock gaps and meet specifications.”

He adds that this is not merely a European issue, citing similar issues in the U.S. regarding bottle-to-bottle recyclers closing their doors, harmed by cheaper virgin resin.

“The bottom line is that the current difficulties are caused by a combination of cheap virgin and weak enforcement of recycled content mandates, not by Asia supposedly flooding Europe with rPET,” he writes.

Craipeau recommends the EU should use its new split customers/HS coding to “hit imported virgin PET with antidumping or other trade defense measures where warranted,” while leaving rPET flows alone. He also says the EU should enforce minimum recycled content mandates with real penalties to create a more level playing field and tighten traceability and certifications to fight fraud without blocking the “legitimate rPET” needed to meet specifications.

Citing movement by EU authorities to develop “end-of-waste criteria” that will make it easier to trade recycled plastics as raw materials within Europe, as well as the development of recycled content rules, BIR Plastics Division President Henk Alssema of Inviplast in the Netherlands says there is positive news for the future.

However, he writes that prospects of a rally for recycled resin markets appear limited in the short term.

“At the start of 2026, the overall picture in the European recycling market is one of stabilization after a prolonged period of pressure, but still without convincing signs of recovery,” he writes, adding that a common phrase he hears from industry participants is, “The bottom seems to have been reached, but there is no upward momentum yet.”

While pricing has somewhat calmed in Europe, Alssema writes that pressure on its recycling industry has not disappeared and there has been no abrupt end to bankruptcies or facility closures. In many cases, he says, “the weakest players have already exited the market; meanwhile, the remaining companies are operating at low utilization rates, postponing investments and being highly selective about which volumes and qualities they continue to produce.”

The direction is clear, he writes, with Europe moving toward less capacity, more consolidation and a greater role for integrated players that can combine scale, security of offtake and access to feedstock. “This process will not stop on its own as long as underlying market conditions fail to improve.”

Reporting on the Middle East, Mahmoud Al Sharif of United Arab Emirates- (UAE-) based Sharif Metals Group DMCC points to similar issues. Oversupply of low-cost virgin resin has driven down prices in his region, making recycled plastics more expensive and less attractive to manufacturers.

“In the Gulf Cooperation Council region, the dominance of low-cost virgin plastics from petrochemicals is undermining the business case for recycling, which often cannot compete economically,” he writes, adding that at the same time, energy-intensive mechanical and chemical recycling processes have driven up energy costs and operating expenses, cutting profit margins.

“In many markets, recycled content mandates and other supportive policies have either been delayed or remain unclear, making it hard for businesses and investors to plan a long-term recycling infrastructure,” he writes.

Despite policy pushes, Al Sharif writes that recycling rates in Saudi Arabia and the UAE remain low, hovering around 10 percent.