While prices of PE, PP and ABS remained stable in the run-up to the Chinese New Year holidays, demand for prime materials has been softening owing to conflicting reports of COVID cases occurring recently in China. This was despite oil prices breaking into US$ 50 per barrel territory.
PC, PMMA, Nylon and POM fluctuated within a range of more than US$ 100 per ton in the first half of February after prices plunged in December. Traders and end-users are cautious about committing themselves to deals amid new strains of Coronavirus and the uncertain economic outlook.
Recycled materials have been selling well, especially for the right qualified and natural materials. Clear, transparent LDPE pellets, for example, have increased to more than US$ 750 per ton. HDPE, PP, ABS, PS, Nylon and PC are performing well owing to the short supply of scrap materials. Some brand-owners have started to use recycled pellets for their products in order to achieve extended producer responsibility objectives.
Plastic scrap supply has been reduced by half following the enforcement of Basel Convention amendments coupled with COVID impacts. Most countries and stakeholders are uncertain about what they can ship under the B3011 and Y48 entries, and about prior informed consent procedures. The forms of scrap that have been most affected are WEEE, mixed plastics, contaminated plastic scrap and unsorted mixed plastics, requiring notifications between importing and exporting countries/parties to the Basel Convention.
Processors are struggling to obtain sufficient feedstock to keep their operations going. Another challenge for recyclers is the increase in freight rates and booking cancellations by shipping lines. There are shortages of vessels, equipment, trucks and drivers at exporters’ ports owing to the impact of COVID. The situation will not improve before March, but hopefully conditions should ease with progress in the vaccination roll-out programmes.
Fukutomi Co Ltd (CHN), Executive President of the China Scrap Plastics Association, Board Member of the BIR Plastics Committee