Heavy demand for recycled plastics likely to remain says BIR

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Henk Alssema
BIR plastic committee chairman Henk Alssema

BIR’s Plastics Committee has said that heavy demand for recycled plastics should last for the rest of 2021.

Henk Alssema from VITA Plastics in the Netherlands and chair of the BIR Plastics Committee said that recyclers are optimistic despite a lack of input material and problems in the transportation sector.

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He added: “The European market for recycled LDPE continues to be strong. In contrast with expectations in June, demand is still high and the forecast for August remains positive. The price of natural LDPE regranulate is around €1350 per tonne while for black the price is approximately €700. Very high demand in Europe for HDPE regranulate has pushed prices higher, with end users paying up to €1450 per tonne for natural and around €1150 for black. However, recyclers are still struggling with regard to availability of input material. Post-consumer mixed bales were selling a few months ago at €500 per tonne but, over recent weeks, recyclers have been paying €600.

“The European recycled PP market is very strong and higher prices have been seen over the last three months. Demand for July and August delivery has continued to support prices for both natural and black pellets, which are around €1490 and €1150 per tonne, respectively. Input material is still limited and the output of pellets from recycling plants is very tight, especially for white, transparent and natural.

“Container shipping is still a problem owing to the recovery of the global economy. There has been huge demand since the second half of last year, especially from the USA, and this boom is still not abating. This has led, and is continuing to lead, to a growing discrepancy between the number of incoming ships and the unloading/loading capacities of the ports and the entire logistics system in the hinterland. Effects include delays and an extreme shortage of containers.”

While Max Craipeau from Greencore added that most import licences into Turkey are being renewed following the re-opening of the country, although there may be some limitations on maximum contamination levels.

He also discussed PE and PET prices, writing: “Since the beginning of the year, rPE and rPET have experienced unprecedented high prices, especially in Europe where demand is supported by more and more brand owner pledges and legislation aimed at higher recycled contents. Food-grade rPET pellets are selling for €1750 (US$ 2000-plus) per tonne, which is far above virgin PET prices, while low-MFI rLDPE pellets can fetch above €1500 for the clearest grades.”

Sally Houghton from The Plastic Recycling Corporation of California shared her experience of the US market. She said: “In the first two quarters of 2021, US reclaimers increased their PET capacity, with those in California by up to 25%, which resulted in strong supply requirements. As a result, PET prices in the USA have more than doubled from the start of the year. Currently, West Coast PET A grade is averaging US$ 0.34 per lb while rPET clear flake across the USA has reached up to US$ 0.70 and rPET pellets remain at a high of almost US$ 0.90. PET resin prices remain flat, currently at around US$ 0.70 to 0.75 per lb. Resin producers anticipate production to be tight for the remainder of 2021.

“There is continuing PET demand from outside the USA, especially from Europe although it is less aggressive than in the first quarter of this year owing to the increase in summer volumes, high freight costs and shipping line delays. It is anticipated that demand will stay strong but that summer volumes will put slight downward pressure on bale prices. Export continues to be problematic as it is not the supplier’s first choice. Sales to Mexico have slowed because an increase in that country’s domestic collections is easing demand; also, trucking and cross-border delays are frustrating suppliers.

“Natural HDPE continues to break pricing records, with post-consumer bales reaching an average of US$ 1.05-1.10 per lb across the country as demand exceeds supply. More recycled content is being used in the manufacturing of all HDPE products, thereby stimulating demand. Likewise, colour HDPE has seen greater demand, with more use in industrial applications. Clear LDPE has seen an increase in value, selling at an average of US$ 0.30 per lb. The strength of demand is coming from aggressive California-based manufacturers who need to meet state mandates requiring 40% recycled content in bags. Lower-grade LDPE is struggling to find markets owing to the higher levels of contamination.

“PP continues to be a growing commodity, with more MRFs sorting the material. This market growth is reflected in an increase in values: in 2020, it was selling at an average of US$ 0.10 per lb but in 2021 it has jumped to US$ 0.25. This is developing strong markets in the USA. California is in the process of debating future recyclability guidelines for this post-consumer resin.

“PS is the least sought-after commodity; if sorted and clean, however, EPS has value and a stable export and domestic market. This is not the case for mixed PS bales which have limited to no value and for which the market is flat.

“There are two major issues that could restrict growth for the recycling industry: labour and trucking shortages. Across the country, these two factors are causing problems that are curtailing expansion. If these concerns are overcome, US reclaimers will be operating at higher capacities and with greater efficiency by the end of the year.”

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