Despite this, UK recyclers have been supported by the relatively high packaging recovery note (PRN) price of more than £300 a tonne. Some have even said this has prevented the market from “crashing”.
In an update on the BIR website, the group explained that despite a dip in energy bills and inflation rates, recyclers in many parts of the world are still facing a number of challenges. This includes the impact of low virgin prices, a shortage of skilled workers, rising wage costs, inflationary pressures, and the destabilising effects of the Ukraine conflict.
In China, the BIR said some factories have either stopped buying recycled content or are closing temporarily until markets improve, while several conglomerate-run recyclers are “out of the business following poor financial results”.
The BIR added: “These issues can be seen not only in Asia but also in developed countries…For example, reports from Europe indicate that some plastics recyclers reduced capacity towards the end of 2022 owing to the very good supply of cheap virgin grades.”
In recent years, through policies such as the Plastics Packaging Tax, recyclers have been able to benefit from increased demand from producers for recycled content. This has meant they have been less impacted by the virgin price than in previous years. However, it has been reported that the virgin prices is now so low that it has disrupted this.
UK
From the UK perspective, some bottle grades are still being affected by very weak demand for material, especially in the case of clear and light blue PET and in turn, mixed bottles. “This is not being helped by the current low virgin polymer prices, which makes virgin material more attractive,” one recycler explained.
The high PRN price is helping, and it is hoped that moving into spring, the changing seasonal demand and expected increase in mixed bottle infrastructure coming online will help the market to pick up.
Cargo
The BIR added that trade has also been helped by a return to pre-COVID freight rates for Asia-bound cargoes from Europe and the USA, as well as for most of the Asian cargo heading in the opposite direction.
“At the same time, however, the EU Parliament has approved the EU Waste Shipment Regulation revision favouring a ban on plastic scrap exports to non-OECD countries, likely to come into effect three years after the revised regulation enters force.”
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