22 February 2016 by Will Date

Plastics scrap demand ‘solid’, exporters claim

Traders of waste plastic for recycling have expressed renewed optimism of an upturn in trading conditions, with the return of demand for material from manufacturers in the Far East offering some buoyancy in the market.

However, there is still a level of caution over the potential for volatility in demand, which could have an effect on the price paid for scrap from local authorities and businesses, following what was a particularly challenging year for the recovered plastics sector in 2015.

Export demand for plastics scrap is beginning to return, traders have reported

Export demand for plastics scrap is beginning to return, traders have reported

Last week saw many buyers in the Far East return to the market following a slowdown in production coinciding with the Chinese New Year. Some had feared that demand may have been reduced when compared to the trading period prior to the New Year shut down, but the message from traders this week has been one of cautious optimism.

Speaking to letsrecycle.com one plastics recycler said: “Generally we are seeing a bit more demand, but the question at the moment is whether it will be short-lived or here to stay.”

Richard Williams, managing director of Northumberland-based Greenbridge Recycling – the UK supplier of plastics to Suzhou Resource and Recycling Investment and Development Co – claimed that focus in the Far East is increasingly aimed at securing a higher quality of material from suppliers.

He said: “The organisations we work with in China have all been impacted by the changing environmental climate with some reporting longer shut down periods and weaker demand for their products. While we still have solid demand for materials the emphasis on quality and consistency is ever growing.”

Returning demand from Asian buyers is likely to be welcome with scrap prices largely having been subsidised by a high PRN price, which had reached close to £50 in recent weeks, but had begun to soften in the wake of the final packaging recycling figures for 2015 published this month.

The figures indicated that levels of plastic waste collected for recycling had been higher than anticipated towards the end of the year (see letsrecycle.com story). As a consequence demand for material to meet packaging recycling targets has reportedly cooled, bringing with it a slight reduction in PRN values to between £30-40, traders claim.


Stuart Foster, chief executive of plastics recycling body Recoup, noted that the figures confirm that the UK is heavily reliant on export markets to fulfil its overall packaging recycling obligations, and warned that this is likely to continue with recyclers and suppliers ‘under pressure’ to tighten margins in light of market conditions.

He added: “While the higher profile casualties in the bottle reprocessing markets in 2015 had underlying issues which were amplified by the market conditions, reprocessors have no choice but to adapt to the current situation and work with their supply chains. This does mean ensuring sustainable values for input and output materials, alongside commitments to quality of supply.

“While we still have solid demand for materials the emphasis on quality and consistency is ever growing.”

Richard Williams
Greenbridge Recycling

“There is no doubt that the financial justification for using recycling content is weakened at the moment, leaving manufacturers reliant on the strength of their sustainability policies when making business decisions. Mandated recycled content requirements may be the only way to ensure an even playing field amongst all manufacturing market competitors in the longer term, as those leading the sustainability agenda should not be at a financial disadvantage to those that ignore it.”

Boomerang Plastics

The volatile nature of the plastics market has been evident with the closure and major restructuring of a number of plastics recycling businesses over the last 12 months, the latest of which, Boomerang Plastics, closed its doors after four years of business last week.

Boomerang Plastics, which processed food-contaminated PP pots and trays from manufacturers including Muller, claimed that a ‘perfect storm’ of falling oil prices, insurance costs and a ‘lack of incentive’ to recycle in the UK had led to the closure of the business. The company also suffered a fire at its facility at Tamworth, Staffordshire in late 2013 (see letsrecycle.com story).

Boomerang operated sorting, washing, drying and granulating systems, with the resulting recycled plastic flake sold to manufacturers for the production of garden furniture.


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