Recycled Plastics Markets Struggling
The market for scrap plastics, like most other recyclable commodities, is in a significant freefall. The strong markets, when oil and resin prices were climbing, have been replaced with minimal demands and prices declining on a regular basis.
The difficult markets are not limited to North American buyers, but handlers of the material throughout the world. One domestic buyer of PET plastic says that the company for the first time has begun adjusting prices downward mid-month, reflecting the lack of demand for many grades of plastic.
Like other markets, several recyclers point to the absence of Chinese markets, which have created a huge backlog of supply with minimal alternate sources.
Containers of scrap plastic are sitting at many Chinese ports with Chinese buyers reneging on the orders. As earlier noted, the problem with material is one that is plaguing not only plastics recyclers, but paper and metals recyclers, who had earlier had orders for material from Chinese sources.
What has been so alarming for many recyclers is the short time in which the drop occurred. After moving at steady to strong clip through the first half of this year, the modest softening, which began in late summer, accelerated, and over a few weeks (late September/early October), demand almost totally dried up.
During the BIR’s Fall Conference, several speakers touched on the problems taking place in Europe. One speaker notes that French recyclers, who were shipping steady amounts of scrap plastics through August, have seen sales drop during September. “There is no immediate visibility on the market evolution,” says Jacques Musa, from Veolia.
In China, the Musa notes that the last price for LDPE was $850 per ton, while the price in September was around $1,600. “Factory activity is down by 40 percent, and some converters have shut their lines. Chinese prime PE and PP producers have shut down or reduced their operations. We have heard of a few Chinese plastics companies who are facing bankruptcy.”
During the same meeting, Surendra Borad, Gemini Corp. NV, noted that Indian markets also are in a difficult situation, although not as challenging as China. A main reason, Borad notes, is because India has not been importing as much scrap plastic as China.
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