Asia and Eastern Europe

Generally speaking, plastics recycling activity cannot keep up with the increase in demand across the world. End consumers are asking for more sustainability and so manufacturers have no choice but to incorporate ever-increasing recycled content in their products; it is no longer limited to PET bottles but extends to the entire recycled resin spectrum.

Industry association PlasticsEurope endorses revisions to the EU’s Packaging and Packaging Waste Directive while calling for a new recycled content target of 30% by 2030, which will eventually lead to a decoupling of all recycled resin prices from those of virgin polymers and thereby support recycling efforts.

Meanwhile, the whole world is being affected by an energy shortage and rising electricity costs; the UK has seen a large number of temporary petrol station closures and China is scrambling to fix its power crunch. European petrochemical producers will aim to pass on their higher input costs to customers over the coming months as high natural gas prices filter down to electricity bills; this is also affecting recycled resin production costs.

Electricity shortages and rising costs are affecting Chinese factories, which are being rationed to run only three or four days a week as opposed to the usual 24/7. This is pushing up their production costs and may lead to mass worker lay-offs in the near future if the situation were to continue.
As for logistics, 40-foot high-cube containers from Asian ports to main European and US ports are still in the range of US$ 13,000 to 20,000. Therefore, it is still uneconomical for most recycled resins to be shipped to Europe and the USA. Prices from major South East Asian ports to China remain at acceptable levels and so most recycled resins are continuing to head in this direction.

Thanks to high prices for rPET flakes in Europe (Euro 1450 per tonne FD North West Europe) and in the USA (US$ 1600 per tonne FOB Los Angeles), a reasonable number of quality flake cargoes are still heading from South East Asia to Europe and the USA despite high freight costs. High prices for bales and flakes are narrowing the spread between rPET flakes and rPET food-grade pellets. These pellets are continuing to decouple from virgin and are reaching historically high levels of US$ 2025 per tonne FOB Los Angeles and Euro 1800 per tonne FD North West Europe.