BIR World Mirror on Plastics – Issue July 2023: Brand owners putting bottom line first and choosing prime over recycled
A concise summary of the BIR World Mirror on Plastics – Issue July 2023. Full version with detailed market reports available in the Members Only section of the BIR website.
Recyclers are facing serious business issues as low demand has kept prices under severe pressure, confirms the latest World Mirror released by the BIR global recycling organization’s Plastics Committee. These conditions are prompting ever louder calls for legislation to underpin the use of recycled content.
In Europe, prices of recycled plastics have dropped even further over recent months and massive stocks have been built as economic uncertainty has led to a substantial drop in consumers’ purchasing power. Despite commitments by brand owners to use more recycled material, low prime prices have persuaded many to take this latter option for financial reasons, particularly in the case of PET. Recyclers have been forced to market their material at huge discounts, to cut production or to stop their lines altogether.
The US market for all recyclables has seen a gradual decline and lacklustre demand. Post-consumer resins are struggling with three major issues: cheap imports, high summer volumes and uncertain markets. These are causing prices to drop, with little relief in sight. It is anticipated that markets may see an uptick at the start of 2024 and gain momentum halfway through next year.
In China, prime prices have remained mostly the same over the last two weeks as the Development and Reform Commission in Beijing has announced measures to boost energy efficiencies by phasing out/eliminating outdated petrochemical production plants, including PE, PP and PVC production lines. This initiative should help reduce overcapacities in plastic resin supply chains.
Demand has remained slow for recycled pellets in China as downstream product manufacturers need more orders. The low cost of prime and the abundance of recycled materials both domestically and imported from South East Asian countries are negatively impacting market sentiment.
Low virgin PET prices in Asia have largely confounded efforts by recyclers to stimulate demand through price cuts. Fast-moving consumer goods companies are said to be prioritizing their bottom lines, leading them to replace the more costly rPET with cheaper virgin materials, thus diverging from their sustainability targets.
Meanwhile, the implementation of Deposit Refund Schemes (DRSs) is gaining momentum. Singapore has deferred the launch of its highly-anticipated DRS to 2025, aligning with Poland’s announced scheme for the same year. Both countries are aiming for collection targets of over 80%, largely facilitated by the increasing popularity and use of reverse vending machines.
From Spain, meanwhile, comes the positive news that plastics recycling capacity is already the second-largest in the EU and is expected to continue growing thanks to: a Euro 300 million economic stimulus plan for strategic industries towards the development of a circular economy; and legislative advances such as the creation of a tax on single-use plastics, extended producer responsibility legislation for industrial and commercial packaging waste, and end-of-waste status for recycled plastic materials to promote the market for secondary raw materials.
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With contributions from its members, BIR publishes periodical commodity reports under the label "BIR World Mirror". These detailed reports exist for Non-Ferrous Metals, Ferrous, Stainless Steel / Alloys, Paper, Plastics and Latin America and provide BIR members with up-to-date information on the respective commodity or market segment.
The report on Non-Ferrous Metals appears once every two months, whereas Ferrous, Stainless Steel, Paper and Plastics are published quarterly. Latin America is covered twice per year.