OFF THE PACE
The trade group European Plastics Recyclers (EuPR), www.plasticsrecyclers.eu, has warned that the European plastics recycling industry "is under threat due to a combination of circumstances affecting the market."
In a news release, Brussels-based EuPR states that the plastics recycling industry has been growing and evolving rapidly, having recycled more than 5 million metric tons of plastic scrap in 2007.
However, the group cites several rapidly changing circumstances that threaten to reverse plastics recycling growth.
"Firstly, the margins for plastics recyclers vanished due to the implosion of virgin plastics prices combined with the high price of the collected plastic [scrap]," according to the EuPR in its press release.
"Secondly, there has been a sudden stop of oversees export of plastic [scrap]," the trade group continues. "EuPR working groups have always stressed that local [scrap] has to find a local solution and that export is a threat to sustainability."
EuPR adds, "The abruptness of the export stop created huge logistical challenges and might overstretch the capacity limits of certain collection systems. Moreover, the price of plastic [scrap] did not fall as it could be expected given the market supply and demand situation."
Plastics recyclers in the United States are facing similar issues related to the effect of collapsed export demand. Those who rely less heavily on export markets have fared somewhat better since the markets began their decline in late October of 2008, though that’s not to say the market decline has left them unfazed. Domestic demand has been softer as well in light of the recession.
In mid-December, a Texas-based recycler said there were no orders for secondary plastics from China at all. The Latin American market was still consuming material, "but since the dollar weakened against foreign currencies, it makes our material more expensive to buy, so volume has dropped," he noted.
As of mid-January, this same recycler says export shipments to Hong Kong and to mainland China have picked up somewhat, though he adds that pricing remains weak.
As a result of the decline in overseas shipping, container rates are decreasing and their availability is increasing. However, as the Texas-based recycler notes, "[Export] orders are tough to come by in this market."
Generation of post-industrial as well as post-consumer material is off compared to years in the past. The economic crisis means many plants are not operating at full capacity, resulting in less industrial scrap for recyclers.
The reduction in generation is more pronounced for post-consumer material than for post-industrial scrap, the recycler says. The Texas-based recycler says that when it comes to post-consumer materials, there is "less scrap generation because it does not pay to recycle as it used to, so material is ending up in landfills." He adds, "Pricing for post-consumer materials is for the most part too low to encourage recycling." Additionally, according to some news reports, the Texas-based recycler says, "some municipalities have stopped their curbside recycling programs because they are becoming too costly since the revenue on the recyclables is way down."
Domestic demand for recycled plastics also has been affected by the dour economy, with all grades seeing a decrease in demand, the Texas-based recycler says.
(Additional news about plastics recycling markets is available online at www.RecyclingToday.com.)
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