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Report for China & South East Asia

The following table shows recent prime prices taken from China’s major virgin polymer websites, inclusive of VAT and quoted in Renminbi (RMB) which has an exchange rate of 7.2465 to the US dollar at the time of writing:

May24 Plastics Mirror Steve Wong

Having ranged recently between US$ 81 and US$ 85 per barrel, this significant level of crude oil price volatility has been influenced primarily by two key factors: positive economic remarks from US Treasury Secretary Janet Yellen; and market fears arising from geopolitical tensions.

With well-balanced supply/demand factors, prime materials such as PS, ABS, PP and PE remained stable in China ahead of the Labour Day holiday starting on May 1. PMMA recorded a US$ 200 per ton hike in the second half of April, marking the most significant price increase among prime materials due to higher costs and decreased availability as a result of recent production cuts. For PC, POM and nylon, increases in demand and prices have been observed for some individual brands, driven by the latest stimulus policy encouraging consumers to trade in old cars for new via a RMB 10,000 subsidy.

Additionally, production cuts at most petrochemical plants have helped stabilize prices, with most producers having reduced their operations to around 50% of capacity in order to maintain selling prices. China’s exports of prime resins to the rest of the world have impacted global prices. PET and PVC prices have fallen owing primarily to a drop in feedstock values, having previously been pushed up to unreasonable levels as a result of the effects of geopolitical tensions.

In China, recycled PE and PE have maintained stable prices amid steady demand whereas PS, POM, ABS, PMMA, PC and nylon values have increased, reflecting prime price hikes and increased demand for recycled content. Most recyclers of styrene materials are busy fulfilling orders for electrical appliances, both for direct applications and for compounding into specific qualities such as the addition of flame-retardant additives or glass fibre reinforcement.

Thermo-recycled PMMA and PMMA monomer from PMMA scrap are in high demand owing to rising prime prices, boosting hopes of a buoyant market. PET and PVC prices have softened owing to slow demand from the fibre and construction industries. Currently, many recyclers in Asia are selling PET flakes, popcorn from the agglomeration of PET film and recycled pellets locally or for export to the rest of the world. However, the recent plunge in PET flake prices of more than US$ 100 per ton in the USA has attracted the attention of local recyclers and stakeholders, and has been attributed to brand owners’ use of more low-priced prime materials.

At the time of writing, scrap PP and PE prices have remained unchanged from previous weeks. However, scrap PMMA, PC, POM, ABS and PS are selling well provided they are pure, free of contamination and easy to process as most recyclers prefer to avoid labour-intensive and complicated processing steps.

Recently, demand for recycled materials has slowed across the globe owing to low prime prices, raising concerns about the industry’s survival. Recyclers are receiving offers on a daily basis but the challenge has become one of finding prices to match what buyers can pay. Low prime prices are continuing to impact scrap plastics, exemplified by HDPE prime and off-grade being quoted at less than US$ 700 per ton FAS Houston, with no confirmed orders as of April 26. Low-cost prime resins are available in China and the USA, and from petrochemical producers globally, seriously affecting the recycling industry and the export of their overcapacities.