Plastics reprocessors anticipate price boost

While any increase in prices would be welcomed by the reprocessors, they are also keen to see more bottles collected from the domestic waste stream with some companies believed to be importing bottles for reprocessing in the UK.

Manufacturers of plastic products are already seeing increases in the price they have to pay for virgin material and some may opt to increase their usage of recycled material as a way of reducing costs. However, while the reprocessors – who chip or flake collected film or bottles – may be able to edge their price up, it seems that few in the industry expect price increases to have much of an effect in the local authority plastic bottles sector.

Prices

Overall this month, there has been very little movement in prices paid by reprocessors for plastic film and bottles. Generally the film comes from back of stores and industry with bottles arising in the local authority sector and while industry might be able to demand a higher price there seems to be little expectation of this among councils. One recycling officer told letsrecycle.com that in the past increases in crude oil prices have not “trickled down” to local authority level.

Demand

On the demand side, although some plastic reprocessors are exporting their material to China and the Far East, others are experiencing a growing demand from UK manufacturers.

Alan Davey, general manager of Linpac Plastics Recycling, which produces a recycled flake, said: “We are finding a very healthy demand from UK manufacturers as long as we control the quality, consistency and specification of our material.”

And he added that there is now a vast range of industries, including packaging, automotive, construction and electrical goods, are increasing the use of scrap plastics. And, he emphasised that “there is no end-market limitation in the UK, but it is prejudiced by the amount of material going to China.”

Exports

The export market remains very important to UK collectors of bottles with some estimates suggesting that between 25-30% of scrap plastics are going to China. Good markets have emerged for post-consumer plastics elsewhere including France and the USA.

The Chinese interest remains one of the strongest market forces in the scrap plastics industry, despite restrictions imposed by the Chinese government that allow only shredded bottles to be imported.

Consequently, some UK exporters who previously sent mixed bottles to China for sorting, are now shipping them to other Far East countries for sorting before onward shipping to China. There have also been reports that some companies are exploiting a weak spot in the regulations by shipping the material to Hong Kong.