BRUSSELS
,
February 25, 2022
(press release)
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A concise summary of the BIR World Mirror on Plastics – issue February 2022. Full version with detailed market reports available in the Members Only section of the BIR website. Demand for recycled plastic remains at exceptionally high levels and price disconnects to virgin resin are becoming ever more established, not least because of recycled content mandates and the commitments made by an increasing number of global brands to increase their recyclate use. These forces are combining to boost collection and recycling activity around the world. In Eastern Europe, for example, more investment and acquisitions are taking place, often in the form of joint ventures between fast-moving consumer goods brands and local recyclers; a notable recent development in the region has been the launch of a deposit return scheme in Slovakia. In Asia, meanwhile, brand pledges are helping to boost collections of PET bottles; in some countries, such as Indonesia, collected-for-recycling rates are now comparable with those in France despite 97% of the bottles being collected by the informal sector. In China, the recycled plastic market has returned to buoyancy following the end of the Lunar New Year holidays but most recyclers still face the problem of insufficient raw material. Plastic scrap supply is tight as the tonnages collected since the end of last year have been much lower than expected. Indeed, recyclers in general are struggling to obtain adequate quantities of input material to enable major global brands to meet their commitments. Extremely high freight costs are severely restricting EU- and US-bound shipments from Asia that might otherwise help to bridge the demand gap. Freight issues are not limited to long-haul cargoes: in the USA, for example, heavy cost increases are also impacting inland freight movements, while port congestion and driver shortages are also complicating day-to-day business activity, as are staff shortages at recycling facilities owing to COVID infections. Despite an increasingly heavy freight rate and energy cost burden, recyclers generally appear to be able to incorporate these increases into their sales prices and to keep their margins largely intact. Two significant developments were announced in mid-January. First, Eastman Chemical Co. added to the current surge of investment in chemical recycling by revealing its plan to invest US$ 1 billion in building the world’s largest chemical recycling factory in France. A number of other major chemical companies - including ExxonMobil, BASF and Sabic - have invested or are about to invest in this growing recycling method. And second, it was announced that a trading platform for plastics feedstock is scheduled to open in mid-2022. Based in Abu Dhabi, the Rebound Plastic Exchange (www.reboundplasticexchange.com) will be aimed at facilitating global trade in recycled plastics through “standardization, quality assurance and efficiency”. In other news, the CMA group has announced that it will no longer carry plastic waste on its ships from June 1 2022 - a decision that is expected to have a significant impact on the shipping of wastes from country to country and that may therefore create a more localized recycling industry.
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