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 7.0972 to the US dollar at the time of writing:

The New York crude oil market has demonstrated resilience and closed recently at US$ 68.65 per barrel as supplies returned to normal after hurricane-related shutdowns. Despite unchanged geopolitical and economic conditions, the market has shown stability.

Potential US interest rate cuts offer a beacon of hope for prime materials, increasing global demand and prices; at the same time, declining oil prices have been reducing feedstock costs. The drop in shipping rates from, typically, US$ 9000 to US$ 5500 per 40-foot container has enabled Chinese exports to Western countries, thus stabilizing market prices domestically but impacting global values. China’s annual production capacity exceeds 250 million tonnes and accounts for over 65% of global demand. Prices are being affected by international orders and a stagnant domestic market, with most prime prices fluctuating within a 5% range over recent weeks. Notably, PET prices have decreased from Yuan 6800 to Yuan 6300 per tonne.

Pessimism continues to reign in China’s recycled materials market amid signs of deflation. Recycled ABS prices have dropped by Yuan 200 per tonne owing to low downstream order volumes. There is a declining demand for recycled HIPS pellets for small appliances whereas the market remains strong for good-quality recycled PMMA, POM, PA and PC pellets. Recycled PE and PP are sluggish, with recyclers focusing on the South East Asian/Western markets and their sustainability programmes. FDA-approved PET and HDPE PCR natural from milk bottles are selling at over US$ 2000 per tonne in the USA.

In the scrap sector, low-grade items such as mixed rigid plastics are selling for US$ 120 per tonne in Asian ports, and grade C big bags and shopping bags from materials recovery facilities are going for less than US$ 80. Mixed resins and runners from automotive manufacturers, as well as other materials with a less than 50% recovery rate, are struggling to find markets.

Recyclers are faced with low selling prices but rising production costs, making it challenging to secure materials and make a profit. As a result, the future remains uncertain for the industry.