Martin Robb’s plastic market report: July 2021

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Martin Robb Nevis Resources
Martin Robb from Nevis Resources

The big story in the plastic sector since my last report has been the introduction and then repeal of bans on plastics into Turkey.

In the last few months, we saw an additional import ban in Turkey of LDPE film and rigid plastic grades. This, added to the ban already on 19 12 04 (mechanically sorted grades) earlier in the year, meant that exports to Turkey ground to a halt.

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The ban was announced in May and was due to take effect on 2 July, but the door essentially closed immediately to Turkey for any loads that weren’t already on vessels.

This unexpected announcement came as a complete shock to UK recyclers and with Turkey being the largest market for plastic scrap exports from the UK, many exporters were left scrambling to find alternative outlets for material. The reality is that there is no alternative that can handle the sheer amount of plastic that was being shipped to Turkey.

The result has been that many of the grades that were being successfully recycled in Turkey are now building up in UK yards and now destined to be landfilled or incinerated, despite the insatiable demand that Turkish reprocessors have for this material.

Hungary and Bulgaria were bracing themselves for an influx of plastic imports, as many Turkish companies had considered relocating setting up shop there, but this may be on hold for now.

However, in mid-July reports of a potential U-Turn by the authorities in Turkey began to surface after sustained lobbying by Turkish recyclers and business leaders. This U-Turn was later confirmed much to the relief of UK recyclers.

There will be much tighter controls on quality and inspections, which will be welcomed by all legitimate operators. It will help weed out the small number of operators who continue to blight this industry with illegal shipments from the UK.

On the Turkish side, more site inspections and letters of guarantee will clamp down on processors who flout the rules and regulations. New permits are to be issued and only operators with permits can import scrap plastic. It has been suggested these could be in place before the end of August.

With the initial news on Turkey’s additional ban, plastic PRNs went to around £125 but with news of the imminent lifting of the ban and strong Q2 numbers, plastic PRNs are now mid-£60s at the time of writing.

Despite the difficulties in the sector, demand for recycled polymers has remained high and prices have remained firm. With European processors entering their summer shut down, demand and prices should soften. This will be welcomed by domestic processors who have been under pressure from European competitors.

UK processing continues to grow and it is encouraging to see investment in the domestic market. I sincerely hope this is a trend that continues, enabling us to process more material within the UK.

That said, we are still a long way off being able to deal with all of our own plastic waste domestically so we will continue to rely on the experience and expertise of processors in Europe, Turkey and Asia.

There will be many more challenges for the plastic sector in the coming months but with demand high for recycled content in products and continued domestic investment, there will be some positives too.

Martin Robb is sales and marketing director at Nevis Resources

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