May 9, 2023
(press release)
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A concise summary of the BIR World Mirror on Plastics – Issue May 2023. Full version with detailed market reports available in the Members Only section of the BIR website. Amid lower prime values, demand and prices for recycled materials are coming under heavy pressure. And there is little hope of a quick recovery given the dampening effects of high inflation and interest rates as well as uncertainty in the financial markets, it is concluded in the latest World Mirror on Plastics from the BIR global recycling organization. With the shift in the cost equation, many companies are now reverting to the use of prime material rather than buying recycled, leading to renewed calls for regulation to make use of recycled material compulsory. This is deemed to be the only way to create stability in supply/demand as well as prices; without regulation, it is argued, strong price fluctuations will continue to undermine recycling growth. In terms of market feedback from specific parts of the world, recycled materials are generally selling at lower levels in China owing to the reductions in prime material prices, with an exception being post-consumer recycled natural HDPE pellets. Low prime and recycled pellet prices are badly affecting scrap plastics, with some sorted mixed rigid plastics, agricultural plastics and printed post-industry film having seen sales at zero FOB. On the upside in Asia, trade in Thailand has continued to be supported by the authorities’ recent approval for use of food-grade rPET in domestic bottles. Access to sufficient volumes of high-quality PET bottle feedstock remains a challenge for food-grade rPET recyclers across the region who are generally running at only a fraction of their installed capacities. Meanwhile, freight rates from Asia to Europe and the USA have returned to pre-COVID levels, thereby supporting exports of recycled pellets to Western companies lacking the quality material to meet their minimum recycled content requirements and commitments. In the USA, a 15% drop in end-use purchases since the start of the year has contributed to recent stagnation in PET bale prices. Both coasts of the USA have been affected by strong competition from cheap imports of rPET in flake, pellet, sheet and other finished forms as a result of ocean freight rates having dropped 80% from the pandemic period. From Scandinavia, it is reported that plastics processors have been slower to place orders when compared to last year but that good grades are still in demand. Elsewhere in Europe, a number of legislative developments have taken place, including Germany’s Federal Council approval of a draft law for a special levy on single-use plastic packaging in accordance with volumes placed on the market, with revenues to be used to reimburse the costs of cleaning public areas in Germany’s municipalities and cities. And in a bid to incentivize the use of recycled plastic, Spain has introduced a new tax on non-reusable plastic packages; semi-finished plastic products intended for obtaining containers such as preforms or thermoplastic sheets; and plastic products intended to allow for the closing, marketing or presentation of containers. In another tax-related development in Spain, deliveries of waste, scrap or plastic scrap will not be invoiced with VAT. In other news, it is revealed that SABIC - a public company based in Saudi Arabia - expects to complete its first chemical recycling plant in Europe in the fourth quarter of this year while also seeking more partners for collaboration in Asia to promote wider adoption of recycled plastics. SABIC is aiming to process 1 million tonnes of plastic each year by 2030 to produce renewable polymers under the Trucircle label. Read all international market reports
WITH CONTRIBUTIONS FROM ITS MEMBERS, BIR PUBLISHES PERIODICAL COMMODITY REPORTS UNDER THE LABEL "BIR WORLD MIRROR". THESE DETAILED REPORTS EXIST FOR NON-FERROUS METALS, FERROUS, STAINLESS STEEL / ALLOYS, PAPER, PLASTICS AND LATIN AMERICA AND PROVIDE BIR MEMBERS WITH UP-TO-DATE INFORMATION ON THE RESPECTIVE COMMODITY OR MARKET SEGMENT.
THE REPORT ON NON-FERROUS METALS APPEARS ONCE EVERY TWO MONTHS, WHEREAS FERROUS, STAINLESS STEEL, PAPER AND PLASTICS ARE PUBLISHED QUARTERLY. LATIN AMERICA IS COVERED TWICE PER YEAR.
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