BIR members see wavering plastics recycling support from large firms

Autumn market reports filed by members of the Plastics Division of the Brussels-based Bureau of International Recycling (BIR) paint a picture of unfulfilled expectations for plastic scrap demand in 2024.

Max Craipeau of Hong Kong-based Greencore Resources Ltd. writes in part, “The wide price gap between virgin polyethylene terephthalate (PET) and and recycled-content PET (rPET) as a result of insufficient feedstock has led brand owners to limit their sustainability requirements as there are no legal obligations driving demand.”

Thus, on the demand side, the plastics recycler says, “The anticipated rPET demand uptrend toward the year-end holidays has not materialized. September showed no significant increase in demand and this trend is likely to continue for the remainder of the year.”

Craipeau, who conducts business in Asia and Europe, says Southeast Asian producers of rPET “are struggling to remain competitive, with Indian producers securing more favorable spot and term negotiations with European and North American buyers.”

In Europe, Craipeau writes, “Substitution back to virgin PET is becoming increasingly common, driven by the comparatively lower prices for virgin material. However, there are signs of increased buying interest from the bottle-to-bottle sector in anticipation of the 25 percent recycled content mandate under the European Union’s Single-Use Plastic Directive, coming into effect in January 2025.”

U.S.-based board member Sally Houghton of The Plastic Recycling Corp. of California describes the U.S. market as “highly varied, with certain materials experiencing significant challenges while others are holding steady or even growing.”

Houghton adds, “The rPET market is grappling with supply shortages and strong bale prices, which [were] unusually high for the summer season. This is creating pressure on domestic reclaimers to meet demand. Winter is expected to exacerbate these issues, as consumption of soft drinks drops, leading to further price increases for bales.”

She adds that California, like the EU, has an upcoming 2025 mandate for 25 percent recycled content. Houghton says that is “expected to intensify competition for PET bales, driving prices higher and putting even more strain on reclaimers. While cheap imports of PET resin, flakes and pellets have slowed, lower ocean freight costs could make them more competitive again.”

Craipeau also mentions ocean shipping, writing, “Although shipping costs from Southeast Asia to Europe and the U.S. Gulf have stabilized, the impact has not been sufficient to stimulate trade. While no longer on the rise, freight rates remain high and continue to weigh on the competitiveness of Southeast Asian exports.”

Another Hong Kong-based recycler, Steve Wong of Fukutomi Co. Ltd. says conditions in the People’s Republic of China present different challenges in late 2024.

“Pessimism continues to reign in China’s recycled materials market amid signs of deflation,” Wong writes. He calls markets for recycled-content polyethylene (PE) and polypropylene PP “sluggish” in China, adding that recyclers there are “focusing on the Southeast Asian and Western markets and their sustainability programs.”

In the electronic scrap plastics sector in China, Wong writes, “There is a declining demand for recycled high-impact polystyrene (HIPS) pellets for small appliances [but] the market remains strong for good quality recycled polymethyl methacrylate (PMMA), polyoxymethylene (POM), polyamide (PA) and polycarbonate (PC) pellets.”

Plastics Division President Henk Alssema of Netherlands-based VITA Plastics says many plastics reprocessors in his part of the world “are facing difficulties.”

“Inventories are rising and profits are almost nonexistent, leading companies into liquidity issues," he writes. "More and more companies in the chemical recycling sector are reassessing their ambitions.”

Alssema continues, “Prices of new materials remain low, further pressurizing the prices of recycled material. If sentiment does not change soon, this could put an end to the operations of many recycling companies within Europe, resulting in the failure to meet sustainability goals.”

In the chemical recycling sector, he points to petroleum giant Shell, saying it is “among those companies to have decided to scale back its chemical recycling ambitions in expectation of a shortage of suitable feedstock.”

Alssema adds, “Slow technological progress and uncertainty about regulations are also influencing the company’s thinking. As a result, Shell has concluded that its goal of chemically recycling 1 million tons of plastic waste into pyrolysis oil annually by 2025 is not achievable.”

Alssema, Craipeau, Houghton, Wong and other members of the BIR Plastics Division will convene later this month in Singapore, when the BIR holds its World Recycling Convention Round-Table Sessions Oct. 27-29.