Recycled resin prices rise in Europe even as virgin resin prices drop

In June, recycled plastics producers in Europe continued to raise prices, despite a sizable reduction in the cost of virgin polymers. While demand for virgin material is dwindling due to the worsening economic climate, recycled plastics prices continue to benefit from rising demand and low imports.

All grades, with the exception of recycled polypropylene homopolymers, posted solid price increases last month. It appears that most recycled PP homopolymer trades were agreed early in the month and settled lower in line with virgin material.

Recycled PET prices registered triple-digit gains and recyclers were able to extend their margins as costs increased by only a modest amount. There are, however, signs of moderating recycled PET demand as the price differential between virgin PET and recycled PET has widened considerably this year.

R high impact polystyrene prices are benefiting from growing demand as a result of switching by processors in view of sky-high virgin polystyrene prices.

Recycled polyolefin prices are rising due to higher base material costs and good demand. R low density polyethylene prices increased €50-60 per metric ton last month, R high density PE prices increased €30-50 per tonne and recycled PP copolymer prices were €60 per tone higher over the previous month.

There was generally sufficient material available to meet demand despite a low volume of imported material. All product sectors saw good order intake as more customers initiate sustainability programs and entered the recyclate market. E&E and automotive demand showed signs of an uptick last month.

In July, recycled plastics prices are increasing further as recyclers attempt to pass on higher base material and energy costs. Seasonal processing plant shutdowns for the summer holidays are however curbing demand, and hence, restricting the extent of the planned price hikes.

Recycled PET

Re cycled PET producers pushed through triple-digit price hikes in June with limited resistance as a result of the good demand and low supply. As the cost of bottle scrap increased by only €10-20 per tonne, profit margins have widened.

Recycled PET demand is easing as a result of the increasing price differential with virgin material. In June, clear food-grade recycled PET pellet prices were €650 per tonne higher than virgin PET prices, compared to €270 per tonne in January. PET processors are also reducing their orders for recyclate given the worsening economic climate and growing concerns about softening drinks bottle demand.

Clear recycled PET flake and clear food-grade pellets were in ample supply although colored flakes availability shortened.

In July, PET recyclers are expected to achieve a further price premium over the cost increases. However, the planned price rise is likely to be limited by an increasingly more balanced market.

Recycled LDPE

Good demand and rising base material costs led to further price increases for recycled LDPE product in June. Natural film grades prices were up by €60 per tonne with translucent film pellets and black extrusion pellet prices climbing by €50 per tonne.

Demand remains at a solid level with more customers continuing to enter the market. Material availability was sufficient to meet demand although there were reported shortages of high-quality grades.

In July, higher base material and energy costs should lift prices further while processing plant shutdowns for the summer holidays will curtail recycled LDPE supply.

Recycled HDPE

In June, recycled HDPE prices increased between €30-50 per tonne as recyclers were able to pass on higher costs to buyers given the widening gap between virgin material and recyclate prices.

There was sufficient material available to serve regular customers. Recycled HDPE demand for colored blow mouding pellets remains solid while demand for black injection molding pellets from the E&E and automotive sectors is picking up.

In July, recycled HDPE prices are expected to rise in line with base material costs.

Recycled PP

In June, recycled PP homopolymer pellet prices declined €20 per tonne as the cost of virgin material fell. R-PP copolymer prices, on the other hand, posted price increases of €60 per tonne.

Demand was good last month and automotive sector orders finally saw an upturn. Customer contracts were fulfilled in most cases, although base material was generally in short supply.

In July, R-PP recyclers will attempt to pass through higher costs, but declining virgin material prices could reduce their chances of success.

Recycled high impact PS

In June, recycled HIPS prices surged by €70 per tonne as a result of strong demand caused partly by the very high cost and short supply of virgin material. As more customers turned to recycled HIPS, the surging sales meant that demand far exceeded supply.

As the cost of virgin PS continues to rise in July, recyclers will face no resistance to further price hikes.

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