Prices for European recycled resins drop across the board

No sign of a demand pickup in sight

Europe's recycled resin producers managed to push through a price increase in May linked to higher raw material costs, but in June the short-lived price boost came to an end as a result of lower costs and weak demand.

The recycled PET sector saw the largest price increases, but input costs increased at a faster rate in May,  squeezing recyclers’ profit margins. Recycled PET clear flake prices increased by €40 per metric ton in May, clear food-grade pellet prices increased by €50 per tonne and with colored flake prices were up by just €10 per tonne for the month.

But in June, recycled PET clear food-grade pellet prices have fallen by €30 per tonne with colored flake prices declining by €10 per tonne due largely to the lower cost of bottle scrap. Clear flake prices increased slightly.

In May, few other recyclate classes registered a price upturn; with prices for most classes being rolled over. Recycled low density polyethylene natural film prices saw the biggest gains with prices up €40 per tonne. In most cases, the price rollovers and small price increases for all classes have been insufficient to cover the increased purchasing cost, and hence recyclers’ profit margins are squeezed further.

In June, the prices for recycled LDPE, recycled polypropylene, recycled high impact polystyrene and recycled high density PE injection molding fell, with onlymblow molding grades of HDPE remaining unchanged over the previous month.

While volume calls across all standard recyclate types have picked up slightly over the last two months, demand remains well below normal levels with no sign of a pickup in sight. Recyclers continue to run their plants at reduced rates to match the low level of demand.

Recycled PET

In May, R-PET clear food-grade pellet and clear flake prices increased by €40-50 per tonne because of an increase in the cost of bottle scarp and good seasonal demand.

Colored flake prices were up by €5-10 per tonne with just a modest rise in colored bottle scrap costs. An increase in cheaper imports of recyclate from Asia meant that producers were mostly unable to pass through the cost increase in full.

The upswing appears to be at an end, at least for the time being. In June, only clear flake prices have increased slightly, colored and food-grade pellet prices fell by €10 per tonne and €30 per tonne, respectively. Recyclers had to factor in a reduction of €35 per tonne for clear bottle scrap and a €20 per tonne reduction for colored bottle scrap.

Beverage sector demand is running at normal levels, but may now have peaked for the summer season. Recycling plants continued to operate at normal levels.

Recycled HDPE

In May, recycled HDPE producers were largely unable to pass through the price increases they called for due to growing competition from low-priced imports of virgin material. Producers maintained production curbs but there was still sufficient material to meet contractual obligations.

In June, blow molding prices were rolled over; injection molding grade prices fell by €10 per tonne. For the injection molding material, prices remain under pressure from lower costs and weak demand. Plants continued to operate at reduced rates.

Volume calls by the construction and automotive sectors remained low.

Recycled LDPE

Recycled LDPE prices continued to gain ground in May with the price of natural film up by €40 per tonne and translucent film prices rising by €20 per tonne. These price rises just about covered an increase in the cost of scrap. There was more than sufficient material to cover demand despite ongoing production curbs. Volume calls remained at a low level.

In June, prices fell as a result of lower costs and meager demand. Natural film prices were down by €25-30 per tonne with translucent film prices falling by €20 per tonne compared to the previous month. Recyclers adjusted output to the lower demand.

There are few signs of a demand stimuli for the market.

Recycled PP

Prices nudged higher in May, rising by €10-20 per tonne on the back of higher raw material costs. Recyclers continued to produce just enough material to meet the low level of demand. The only positive demand push appeared to come from the horticulture market.

In June, prices fell due to low demand and pressure from the falling cost of off-spec material. Recyclers maintained low plant operating rates with no sign of any end use stimuli to demand. Consequently, further downward price pressure is likely over the summer.

Recycled PS

In May, price movements showed a wide disparity; some recyclers offered a discount while others raised prices in line with higher purchase costs. On balance, black recycled pellet prices gained around €5-10 per tonne. Recyclers reduced their production rates in line with the low level of volume calls.

In June, black pellet prices fell by €30 per tonne as a result of the lower cost of virgin material and very low demand. Prices are expected to remain under pressure with neither an upturn in virgin material prices nor improved demand in sight.

* source : https://www.plasticsnews.com/news/prices-european-recycled-resins-drop-across-board