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Recycled Polymers – Europe January 2020

by Marta D'Ortona -
  • 28/01/2020 (10:16)
Month: January 2020
€/ton €/ton
Recycled Grades Min Max
R-PET Flakes Clear/Blue 740 860
R-PET Flakes Mixed Colours660700
R-PET Pellets Food Grade12801400
R- HDPE Black Corrugated Pipes (PCR*)600670
R- HDPE Black Pipes (PIR**) 820870
R- LDPE Black Film (PCR*)450550
R- LDPE Film (PIR**)850900
R- homo-PP black injection(PIR**) 750830
R- homo-PP injection (PIR**)860900
R- PPBC injection (PIR**)800990

* (post-consumer recycle)
** (post-industrial recycle)

R-PET Flakes is stable to firmer, R-PET food demand remains strong

R-PET Flakes prices followed a stable to firmer trend in Italy and Northwest Europe, with small increases of around €10/ton seen in Italy and larger increases posted in the European market compared to last month. R-PET pellets food grade saw a mostly stable trend in January.

The R-PET Flakes range was quoted at €800-860/ton for clear grade on FD basis in Italy, while prices for R-PET light blue grade were assessed stable to firmer at €740-800/ton with the same terms. As for R-PET mixed colors flakes, prices were mostly up over the month at €660-700/ton FD. R-PET Flakes prices for clear grade in Northwest Europe were up by around €50/ton over December at €840-920 /ton FD.
R-PET pellets food grade were assessed at €1280-1400/ton FD.

In Italy, the R-PET Flakes market followed a stable to slightly firmer trend in January, after a couple of months of stability or small reductions, on the heels of lower availability in the market. Recyclers commented that market activities were more vivid this month compared to the last quarter of 2019 and this is considered a positive sign for flakes market, which has been suffering the competition of low virgin PET prices. A recycler commented, “We noticed that flakes market was more vivid this month as there are expectations for a firmer trend in the near and medium term. We hope that prices will consolidate their gains next month while we expect an uptrend for flakes material in the second half of the year, after the implementation of the tax on plastic packaging, which should not include recycled products.” In Northwest Europe, R-PET Flakes prices posted an increase of around €50/ton compared to last month mainly due to lower availability of PET bottle supplies. Players concurred that R-PET Flakes market in Europe is under pressure due to an increasing interest for R-PET pellet food grade, despite its higher prices. Players both in Italy and Europe agree that R-PET Flakes market is not likely to see decreases in the short term as expectations are for an improvement in demand while availability may diminish in line with the decrease in consumption of plastic bottles.

As for R-PET pellet food grade, the market was mostly stable compared to December amidst tight supply and strong demand. Yet, a few offers below the €1300/ton were also reported in the market. According to players, the R-PET pellets food grade market remained mostly stable as a wait and see mood prevailed at the beginning of 2020 as market participants are waiting to see the impact of plastic tax on packaging in Italy on European R-PET markets. Demand is largely expected to rise; however, supply is extremely short and it is currently not able to cover the market’s needs. Accordingly, some suppliers reported to be already sold out for 2020. Players also commented that the wide price range is given by the different qualities of the products. Meanwhile, prices are expected to follow a stable to firmer trend in February.

Activities in R-HDPE pipe markets remain thin

R-HDPE pipe markets witnessed a stable to softer trend in January while the sharp drops seen in December were no longer reported in the market. However, low-priced off-spec and virgin materials remain the main factor behind the weakness of the market together with a price reduction of post-consumer bales for January compared to December. A recycler kept his R-HDPE Black Corrugated Pipes (PCR) prices mostly stable compared to last month as he had applied notable reductions in December and refused to lower his prices further. Yet, demand has not revived so far amidst the low season and the pressure from prime materials. A converter in the pipe sector reported that their business has improved compared to last month as good weather conditions and the lack of rains are supporting the construction sector, despite the winter season. Deals for post-industrial R-HDPE Black Pipes, meanwhile, were reported to be extremely scarce as this product continues to remain under the pressure of competitive virgin products. As for February, R-HDPE pipe markets are expected to witness a similar scenario as demand is not likely to revive soon and market fundamentals are not expected to change significantly in the near term.

R-LDPE prices roll over in January

Prices in R-LDPE markets did not witness relevant changes in January as converters reported to have skipped their purchases or limited them to their basic needs, considering the short month in terms of working days after Christmas holidays. A recycler decided to keep his post-industrial R-LDPE film prices stable compared to last month despite the reduced gap with virgin LDPE film. “As long as we are able to keep our prices unchanged, we will try not to concede to reductions. Market dynamics have not changed that much compared to December and we expect mostly stability for February. Nevertheless, we do not exclude to see some slight increases if virgin LDPE market sees an uptrend in the near term.” In Italy, some recyclers commented that they expect a shift in direction towards the end of the second quarter, when the tax on plastic packaging will be effective. However, it is still early to see the possible positive effects on the market at the moment.

R-PP players lament pressure from competitive off-spec PP prices

R-PP prices saw another month of stability in January while players pointed to low off-spec and near to prime PP prices as the main reason behind stagnancy in the market. A recycler commented that they kept their prices unchanged this month as they can’t decrease their prices further due to their production costs. He also added that trading was slightly better compared to December, when they had to cut their offers due to lackluster demand. Sellers commented that it is still not clear how the tax on plastic packaging in Italy will affect their business, although several players think that demand for recycled products may increase in the long-term. As for February, both buyers and sellers expressed expectations for a stable trend as possible hikes on virgin PP prices will not be reflected immediately on the R-PP market.

Price ranges reported include an average freight cost to the customers’ location as well as duties if applicable, although VAT is not included.

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