Quarterly Report – July 2021

Recyclers continue to be extremely optimistic about the sector despite issues such as the shortage of feedstock and logistics.

Since the beginning of the year, rPE and rPET have experienced unprecedented high prices, especially in Europe where demand is supported by more and more brand owner pledges and legislation aimed at higher recycled contents. Food-grade rPET pellets are selling for Euro 1750 (US$ 2000-plus) per tonne, which is far above virgin PET prices, while low-MFI rLDPE pellets can fetch above Euro 1500 for the clearest grades.

Following new Basel Convention export restrictions triggered on January 1 this year, Turkey had been the only remaining viable option for most of Europe’s plastic scrap exporters. But then, as mentioned in my previous BIR Mirror report in May, Turkey announced that a plastic scrap import ban would come into force in early July. Intense lobbying by the plastics industry followed this announcement and now the Turkish government has made a U-turn only two weeks after the ban’s implementation.

There may be some limitations on what Turkish recyclers will be able to import (for example, maximum contamination levels). Basically, however, most import licences are being renewed and yards will be able to resume imports shortly.

Container prices from Asia to Europe and the USA are continuing to rise, with levels close to US$ 15,000 per 40-foot high-cube. This is further limiting export possibilities for flakes and recycled resins from Asia to Europe/the USA, and so these are still mostly heading to China.

Eastern European scrap and recycled resin demand remains extremely robust, with especially LDPE/LLDPE film, HDPE and PP seeing historically high prices and comfortable profit margins for operators. More and more recyclables and recycled resins from Eastern Europe are heading into Western European countries rather than to Asia.