Prices for used bottles have been falling over the last few months as a result of low oil prices which has meant that the price of virgin material has fallen by around 30%. This has caused an oversupply of material in the market as the reduction in virgin prices means that off-spec material is cheaper and so there is less economic benefit from using recycled material. Market conditions have also been worsened by a decline in demand from the Far East and the general slowdown in the world economy.
Andrew Simmons, chief executive of plastics recycling organisation Recoup, said that the market was “not ideal” and that there were issues with the export market with secondary material being “backed up” as a result of a fall in virgin prices.
Mr Simmons told letsrecycle.com how large additional volumes on the Far East market have meant that there is less demand for material, but he said that this could be a short-term issue. “It is a bit of a difficult time, but it may be a short-term issue which could clear up on its own.” But Mr Simmons said that it could take some time and added that he not expect the situation to improve until the second quarter of next year. “The situation will improve but not before the Chinese New Year. Indications are that nothing will happen until March.”
Labour costs
The decline in demand from the Far East has meant that there is also considerably less demand for mixed plastic as the Chinese had paid reasonably well for the material because of cheaper labour costs meant sorting there was cost effective.
Phil Strutt, of Preston-based Plastics Recovery Limited, agreed that the market is very difficult at the moment. He said: “The market in the Far East has fallen by 50% and there is too much stock around.2
Prices for mixed plastics have now fallen from 30-60 in November to 10-40 and some recyclers have said that they have difficulty with shifting mixed plastic.
Stuart Kershaw, plant manager at Reprise, said that more companies would start sorting the bottles themselves because while they could expect to receive 80-90 a tonne in Far East they are more likely to get between 10 and 15 in the UK. One company told letsrecycle.com that it planned to hold a “crisis meeting” to look at how to sell mixed plastics abroad.
Prices for sorted used bottles have also fallen to around 140 – 150 for clear and light blue PET, 55 – 65 for coloured PET, 130 – 155 for HDPE. But another company told letsrecycle that the prices it was getting for clear and light blue PET was closer to 90-110, 0-40 for coloured PET and 100-135 for HDPE.
PVC prices have fallen from 45-65 a month ago to between 10 and 20 a tonne. Prices for HDPE film for mixed colour/printed have also fallen slightly and are now 80-140 from 80-160 last month and single colour/natural has fallen from 160-220 to 150-210. Sums paid for mixed colour/printed LDPE are very varied and range between 70 and 210 with single colour/natural ranging between 140 and 210.
Continued on page 2.
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