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Articles by Surendra Patawari
Few takers for EU plastic scrap
2025 will be crucial for the European plastic scrap market, as the updated and far-reaching Waste Shipment Regulation will begin to have a profound effect on the movement of secondary plastics. Last year, the regulation underwent many changes as policy makers sought to reduce the export of plastic waste from Europe. The most significant change was a ban on such shipments to non-OECD countries from November 2026.
Prime rise aids scrap demand
2024 was particularly challenging for the European plastic recycling industry. On the one hand, more brand owners were committed to increasing the use of recyclables in new packaging while, on the other, cheaper prime plastic was holding them back from using recyclables as they sought to remain competitive in the market. The slow economic outlook pushed many brand owners to choose cost-effectiveness over circulatory goals. Recyclers struggled to sell uncompetitive recycled granules.
Bleak prospects for plastics recyclers
Crude oil prices have been volatile in the last two months. At the beginning of September, they were around US$ 73 per bbl but then slumped by almost 10%, falling to US$ 65 per bbl in just 10 days. By the middle of October, they jumped by 15% and reached US$ 76 per bbl. By the end of October, they were back down to around US$ 67 per bbl. Today, prices hit US$ 69. This volatility fuels more uncertainty to the market.
Prime prices undermine plastic scrap market
As a result, many collectors and exporters of the potential raw material are concerned about future business lane and assessing the stability of their market. Without any doubt, Asian recyclers are dependent on Europe for supplying such waste to run their factories. Without adequate availability, the scale of their operations cannot be profitable. Low availability of recyclable waste in Asian countries limits new investments in recycling capacities on that continent.
Pressure from prime persists
Great efforts were made in 2023 towards sustainability and circularity in the plastic sector, particularly towards using recycled plastics in new packaging. As part of the momentum, brands promised to redesign their packaging with some even looking to reuse packaging to reduce the burden of recycling. The major challenge was always going to be a constant supply of good quality recycled granules. The talk was of reducing prime plastic production and increasing the use of recycled plastics.
Plastics outlook: prime prices offer little respite
Nymex-listed crude oil prices were quoted at US$ 90 per bbl in mid-October and that fed hopes of an upward trend in prime plastics. But the oil price fell back to US$ 80 per bbl within three weeks, leaving little hope for any improvement in the cost of prime plastic this year. The European plastics industry is at a turning point with large investments committed to address that plastic waste which is difficult to recycle and is not currently being processed by mechanical recyclers.
Prices and not promises are key
Despite fine words from leading brands, demand for recycled plastics continues to be too low in most parts of the world. Although financial experts may believe the European Union will avoid recession, the same cannot be said of the secondary plastics market. Demand is heavily affected by low production because of fewer orders for finished goods. No one has much confidence in the market at the moment and there are no predictions for a growth in orders, even in the short term.
Lack of stability hampers trade
Consumption and demand levels are deflated with the uncertain economic outlook playing a big part in driving sentiment. The European plastic market is moving without any clear direction in the absence of a stable economic outlook. Since the beginning of the year, most plastic-consuming industries have been without a clear forecast of finished product orders. In the absence of this demand, production facilities are running at minimum operational levels.
No relief from higher production costs
Bigger energy bills and a surge in inflation continue to hit the value chain while prices for recycled materials have fallen significantly. The European recycling industry remains highly affected by high inflation and energy costs across the continent. The cost of production has increased significantly and that does much to undermine recycling goals. Many recyclers have reduced their capacities and some are on the verge of closing their facilities.
Energy costs and inflation batter sector
Higher bills for gas and electricity, weaker economies and lower oil prices are a nightmare combination for scrap recyclers. High inflation across Europe has not only affected the public but also most industries across the continent. Higher energy bills are another major challenge everyone is struggling with. The plastics recycling industry is also under great pressure due to higher costs. Electricity and gas prices have increased by multiples which is making the industry uncompetitive.
Price link between prime and secondary uncoupled
Brands’ commitment to using recycled content in packaging boosts demand while investors are increasingly attracted to chemical recycling. The plastics recycling industry has been catching the attention of private investors, several of whom have recently come into the market and taken over existing collection and recycling companies, either by purchasing equity or injecting fresh capital as a partner for the expansion of recycling capacity.
Plastic prices still high but trade issues remain
Recyclers face triple challenge of regulation, regional variation in prices and high freight costs. The recycling of plastic – and the growing need to do so – is increasingly being drawn to the attention of people around the world. It is now such an issue that it is not just on the agenda of the waste management industry or relevant authorities; it has reached out to individuals who under- stand how it affects our lives.
Scrap prices buoyant as prime costs soar
Availability of secondary materials in Europe a concern as more converters seek recycled content for packaging. Read the full market update in our latest issue >> The year 2022 started with positive sentiment following clarity on the shipment of plastic waste from Europe to non-OECD countries through an amendment to the Waste Shipment Regulation 1418/2007.
Progess after a year of change
Developments on exports, waste shipments and carbon credit during 2021 have clarified the way ahead for recyclers in 2022 and beyond. During 2021, several key regulatory changes took place that affect our industry, some of which will change the plastics recycling sector substantially. The very first change – applicable from 1 January 2021 – was an amendment to the Basel Convention.
At last! EU updates shipping regulations
As non-OECD importers agree to be bound by new Basel Convention rules, exports to India remain restricted by the previous notification regime. Read the full market analysis in our latest issue >> Finally, plastic scrap dealers in Europe and their customers have clarity on the movement of secondary materials from the continent to non-OECD countries.
EU traders seek clarity over shipment regs
Plastic scrap trade from the European Union remains sluggish in the absence of free exports to non-OECD countries. The European Commission has not yet amended the waste shipment regulation 1418/2007 which determines how waste is exported to non-OECD countries. In the absence of a policy announcement, it’s now been six months during which exporters have been struggling to ship sorted plastic waste, in particular, to these destinations.
Plastic scrap gains as prime prices rise
Larger converters still have to realise the value of using plastic scrap. 2021 started with uncertainty in the trading of plastic waste worldwide because many countries did not adopt the new Basel Convention rules when they came into force on 1 January. There was an absence of information from importing nations about how localised legislation was being updated.
Double challenge of Covid and Basel changes
Last year proved that businesses with flexibility, diversity and receptivity to change would always be among the winners. The plastic recycling industry suffered significantly due to lower collections of scrap and less availability of raw materials. Low industrial output and weaker demand for finished goods pushed the global economy onto the back foot. December 2020 was effectively the final month for European exporters to export plastic waste to non-OECD countries.
Uncertainty dogs weaker secondary markets
New Basel Convention regulations regarding scrap exports due on 1 January require clarification, say traders. Recycled plastic prices have remained unchanged over the last few months due to low demand. Prime plastics prices were so low that customers and converters are not willing to use recycled material. On the other hand, the brand owners’ commitment to using post-consumer recycled (PCR) plastics in their products and packaging is not moving at the required speed.
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