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Chairman's Report

Prices are reasonably stable at present, with the notable exception of HIPS and PET. Severe shortages of qualified personnel are becoming evident in the plastic recycling industry. Meanwhile, chemical recycling could be on the verge of a worrying breakthrough.

In what is bad news for the mechanical recycling industry, chemical recycling may be on the verge of a breakthrough. This has everything to do with the calculation model that the EU intends to use, known as the Fuel Use Exempt method. This is almost equated to plastic from mechanical recycling whereas the consumed fuel in the chemical recycling process is not taken into account.

The chemicals industry is in favour of this but mechanical recyclers are against it. As it stands, the European Commission is likely to stick to this so-called mass balance approach, which creates an uneven playing field between mechanical and chemical recyclers, opening the door to further investment by the chemical recycling industry. According to German research institute Ecoprog, many facilities have already been built in Europe and around 80 more are still on the drawing board. The final number will depend on the extent to which the recycled content from chemical recycling counts towards the recycled content of new products. Despite the EU’s preference for mechanical recycling over chemical recycling, this remains a negative development for the mechanical recycling industry.

The plastic recycling industry is facing significant challenges in finding qualified personnel. Many companies are being forced to scale back production owing to insufficient numbers of available staff. Young people are increasingly choosing jobs in IT and overlooking the mechanical sector despite its high levels of innovation. Experts believe the current generation no longer finds it appealing to work in an environment that operates 24/7 and are seeking a greater balance between work and leisure time. This requires companies to recruit personnel from other parts of the world, partly because the labour pool in Eastern Europe is also starting to dry up.

The market for recycled plastic in Europe has improved since the beginning of this year, but only slightly rather than substantially. Prices have risen modestly in recent months but profit margins are still very narrow, partly due to exorbitant wage increases, higher transportation costs and higher feedstock prices.

Prices for LDPE natural regranulate are between Euro 1150 and 1300 per tonne while mixed colour regranulate is significantly lower at between Euro 650 and 750. Demand is currently decreasing for both materials, which will create price pressure in the coming months. HDPE mixed colour regranulate is currently selling at between Euro 750 and 950 per tonne depending on quality. Owing to imports of cheap prime granules, HDPE prices are also expected to come under pressure in the coming months. PP regranulate is currently ranging between Euro 750 and 1300 depending on colour and quality, but these prices are also expected to drop because demand is not optimal and large quantities of cheap imported material are anticipated.

Fortunately, there are also materials that have not decreased in price and that are expected to rise further, including HIPS regranulate. The price for black HIPS regranulate is around Euro 1100 per tonne, equivalent to an increase of approximately Euro 150 from three months ago. Additionally, PET natural has undergone a significant increase in the past few months: the price for natural flakes has climbed around Euro 160 per tonne to Euro 1200 and is expected to continue its rise in the coming months.