At the second day of the RWM Expo in the Materials Village, the panel above all said that market conditions are “challenging”, with a fall in demand hitting margins as the economic crisis hits consumers’ spending ability.
Since the early days of the pandemic, the panel agreed that demand for recycled content has steadily risen, as brands wanted to do more and consumers were buying more products.
However, with rising interest rates across the board, consumers have been forced to draw in their spending which is now impacting the recycling markets.
Amie Stringer from Viridor explained that the recycled plastic has been disrupted by a fall in the prices of virgin plastic, on top of being hit by the wider economic challenges facing businesses.
She said: “It is challenging. We’ve seen the virgin price fall quite substantially for polymer materials, but recycling material hasn’t fallen in line with that. This then puts pressure on demand for recycled content as people now can switch to virgin.
“This is seen where companies do not have any commitments or requirements. In turn, this decreases demand for recycled plastic, which is then a pressure down on the price.”
Ms Stringer added that during discussions with end users, they are reporting a squeeze on their margins, with the cost of energy and economic conditions meaning they are also trying to save where they can.
“When we speak to producers about increasing recycled plastic content, they’re now pulling back, delaying those projects. Most are sticking now with the very minimum commitments they’ve made, whereas before people were trying to get as much as possible.”
From a glass perspective, Craig Robinson from Sibelco expressed a similar picture.
He said both during and in the aftermath of the pandemic, there was a strong demand for glass products, which in turned increased demand for recycled glass, which is now softening.
“I think the time lag of post-Covid and now the economic situation across Europe is tough. Some of the glass manufacturers are starting to feel that. Part of that effect has been offset by the fact there is still a higher demand for recycled glass going into bottles.”
He added that there as also been lower availability of feedstock, as householders buy less glass to put out at home, with quality issues also occurring, meaning “margins are being squeezed”.
In the paper sector, Chris Burton from IWPP said there “is a a lot of nervousness around the markets at the moment”.
He said the paper market has had three strong years over Covid and afterwards, brought on by the Amazon effect or mills “desperately wanting as much material as they can get”.
“We have gone through that now,” he noted.
“We’re in mid-September and it constantly feels like we’re waiting for the year to start. The UK market has been flat, the European market is disappearing and the only one really left if the far East, and they’re buying because shipping is cheap. They’re not desperate for it, but they will buy it if they can get it.
“There is low supply which has also been met with low demand. The world’s economy is in a pretty bad place and I don’t see that changing anytime soon.”