China reopened its borders on January 6 this year and lifted all COVID restrictions ahead of the Chinese New Year. Factories resumed operations in the first week of February, stirring hopes that trade volumes in recycled plastic might soon increase with the world’s largest market.
However, record-low virgin polymer prices have been affecting sales of recyclate as the economic benefits of using cheap virgin materials have outweighed the momentum for recycled content. A global mandate for minimum recycled content is more important than ever to support the recycling industry.
Meanwhile, chemical recycling projects are progressing throughout Asia. For example, Plastic Energy - a global leader in chemical recycling technology - has signed multiple Memorandums of Understanding in the past few months with South Korea and at the G20 in Indonesia for a combined 200,000 tonnes of annual capacity.
In January, the EU Parliament approved the revised EU Waste Shipment Regulation favouring a ban on plastic scrap exports to non-OECD countries, thus paving the way for negotiations with EU member states. Under the envisaged ban, it would be possible in future to export the EU’s plastic scrap only to OECD countries, making the USA and Japan the only remaining sources of quality scrap for the few remaining countries in Asia that still allow such imports.
Freight rates applying to Asia-bound cargoes from Europe and the USA have returned to their pre-COVID levels and the same is also the case for most of the Asian cargo bound for Europe and the USA, thus giving some help to scrap and repro-pellet exporters in a market that remains sluggish.