In a quarterly report published at the end of July, the Dutch chairman of the BIR committee, Henk Alssema of Vita Plastics, said that the plastics industry can look back on a “very strong” first half of 2021, which he believes is only set to continue.
Mr Alssema noted: “The global economy has recovered more quickly than expected from last year’s slowdown. The plastics recycling industry can look back on a very strong first half to 2021 and expectations are that heavy demand for recycled plastics will continue for the remainder of the year. Recyclers are very optimistic despite a number of issues, such as a lack of input material and problems in the transportation sector.”
The BIR is a federation to support the interests of the recycling industry on an international scale and is based in Brussels.
The European market for recycled low density polythene (LDPE) is reported to be “strong”, and in contrast with expectations in June, demand is still high with the forecast for August remaining “positive”, the chairman said in the quarterly report.
He said that the price of natural LDPE regranulate is around €1,350 (£1,152) per tonne while for black, the price is approximately €700 (£597).
Mr Alssema explained that very high demand in Europe for HDPE regranulate has pushed prices higher, with end users paying up to €1450 (£1238) per tonne for natural and around €1150 (£981.91) for black.
Also remaining strong is the European recycled polypropylene (PP), with higher prices seen over the last three months.
However Mr Alssema explained that input material is “limited”, and the output of pellets from recycling plants is “very tight”.
Reporting on behalf of Asia and Eastern Europe, Max Craipeau of Greencore Resources, BIR plastics committee board member, described the high prices as “unprecedented”.
He noted that food-grade rPET pellets are selling for €1750 (£1494.21) per tonne, which is “far above” usual virgin PET prices.
In China, prices of PE and PP have been moving within a range of $ 50 (£35.94) per tonne over the last two weeks.
An issue seen across the whole industry is container shipping, which is put down to the recovery of the global economy.
Mr Alssema said: “There has been huge demand since the second half of last year, especially from the USA, and this boom is still not abating. This has led, and is continuing to lead, to a growing discrepancy between the number of incoming ships and the unloading/loading capacities of the ports and the entire logistics system in the hinterland. Effects include delays and an extreme shortage of containers.”
Explaining some challenges faced in the transportation side of things, Mr Craipeau pointed to Turkey’s recent u-turn on its plastic scrap import ban, saying that that there may be some limitations on what Turkish recyclers will be able to import, however import licences will be renewed shortly.
He added: “Container prices from Asia to Europe and the USA are continuing to rise, with levels close to $ 15,000 (£10,780.70) per 40-foot high-cube. This is further limiting export possibilities for flakes and recycled resins from Asia to Europe/the USA, and so these are still mostly heading to China.”
Giving a perspective of the market in China, Dr Steve Wong of Fukutomi Co Ltd said that the challenges faced by downstream manufacturers remain “substantial”, with shipping costs and availability of vessel space for export markets on one side and on the other, “weak domestic demand”.
Dr Wong added that despite the high prices, demand is “weak”, with a lack of market momentum. He said that traders are describing the situation thus: “There is a price, but no market.”