Price of plastics shows no sign of stability

Having seen prices for mixed plastic tumble by around £200 per tonne, the plastic recycling industry has suffered further hits with prices showing an additional 10% decline on materials such as HDPE natural, which had so far been fairly robust in the downturn.

The news that plastic prices continue to tumble follows further declines in scrap metal prices which continue to be affected by the international commodity collapse. Recovered plastics are in less demand because of the fall in the price of oil as well as a fall in demand for virgin polymer. Consequently, virgin polymer prices have reduced and there are some reports that the virgin material is being “dumped” in the market as refiners look to keep their plants operational.

Prices

This latest shift has seen the price of clean plastics dropping dramatically, with merchants in England pointing to difficulty in moving material. One member of the recycling industry informed letsrecycle.com that this was a sign of the downturn hitting all grades of plastic.

He said: “When virgin polymer prices fall, the price of clear falls, as people tend to see clear as a direct substitute when virgin polymer is expensive. The price of the coloured material tends to be more robust.”

One operator with MRF-sourced plastic bottles said that orders were thin on the ground for PET, and claimed that HDPE prices had slumped to about £50 a tonne.

Another, in the eastern region, said that he was considering storing some plastic bottles but that it was inconceivable that the material couldn't be moved now. He said: “I can't believe the market has fallen so fast.”

Recoup is looking for merchants with spare warehousing capacity to store plastic bottles, while others in the sector said that mixed plastic bottles were not wanted and reprocessors were requiring the material to be sorted to save on their own sorting costs.

The successive declines in the price being paid for plastic bottles and film over the past three weeks have seen a number of companies, unable to find buyers, beginning to stockpile material.

Bubble

One purchasing manager was more damning about other plastic recyclers' reaction to the crisis, and said: “The market has been in a bubble. I just never understood how nobody realised and now I perceive that it is coming back in line with what other scrap prices are.”

The low price has understandably spread pessimism in the sector, as one sales manager told letsrecycle.com: “It's almost like the blind leading the blind. I cannot speak for everyone but I have got a clear idea of what I am going to put my offered price at – and it's low.”

Despite these declines, one plastic bottle recycling company offered a very different viewpoint and explained that it was “seeing a little bit of stability”. A spokesman said: “The prices are staying put for the first time in a long while. However, there's nothing to say that it's going to rise again in the near to medium future.”

Christmas

One commentator warned that the timing of the market collapse could provide further hardship, as Christmas is historically a time when prices slowdown due to a flood of packaging waste entering the system.

However, given the current market situation, some members of the plastic recycling industry foresee the addition of more material to a deflated market as causing further problems by adding to the current mounds of material that cannot be sold.

An industry expert told letsrecycle.com: “The truth is we are coming up to Christmas and the material values are falling. I, for one, have just had a box for my recyclables delivered and I am supposed to put my commingled collections out, and I am only going to add to the problem caused by packaging at Christmas. We are just going to add to the glut of valueless material in the system.”