Market Update for Prime, Recycled, and Scrap Plastics as of June 9, 2023

Prime virgin prices are sourced from major virgin polymer websites in China and quoted in Renminbi (RMB), including VAT, with an exchange rate of 1 US dollar equaling Chinese Yuan at 7.1305.

New York oil prices fell $1.12 per barrel on Friday in the US section, marking a straight weekly decline, due to disappointing Chinese economic data and an increase in fuel stock.

In China, nearly all prime virgin prices continue to drop as low feedstock prices, overcapacity, reduced demand, and poor market sentiment are impacting the the industry. Polycarbonate has experienced the most significant decline in the last two weeks, with its bisphenol A feedstock sliding to RMB 8965 per ton, a decline of more than 10 percent. Additionally, resuming production lines after annual maintenance is expected to increase supplies in China. POM prices have also dropped due to reduced feedstock prices and low demand. With production operating at only 50 percent, prices have not stabilized due to weak market demand. Most ABS producers are facing losses as prices fall below production costs, leading them to reduce their production output to minimize losses and address oversupply situations. Overcapacity, weak demand, and declining prices are not limited to Asia and China but are observed globally in the polyolefin market. In the US, off-grade PP and PE are being sold at the range of US $800-900 per ton. Whereas, PET was quoted at US $925 per ton FAS China main ports. Market players globally do not anticipate improvements until the end of summer.

Demand for recycled materials in China remains sluggish following the reduced prices of prime resins and a poor economy for both domestic and export markets. As prime prices reach historic lows, more end users are opting to use prime materials, especially considering that the cost of some recycled materials is higher than that of prime materials. There is limited room for further reduction in prices for PP, PET, and PET. Currently, clear general recycled plastic materials are mostly selling at 10 to 15 percent of prime prices, while black recycled materials are priced at 10-30 percent of prime prices. In the US, PCR RPET clear regrinds are quoted at $1100 per ton, FDA approved at around $1700 per ton, and HDPE PCR clear pellets at $2750-3100 per ton. The global recycled material markets are negatively impacted by oversupply and an uncertain economic outlook.

Scrap plastic materials are following the trend of declining prices and demand seen in recycled and prime materials. Low-end PET, PE, and PE materials with a recovery rate of up to 70 percent have no markets as the cost of processing exceeds selling prices. Examples of such materials include mixed bottles, unsorted plastics, and agricultural films. As the US and European markets are affected by the continuing reduction in prime virgin material prices, scrap plastics are being quoted at lower prices. 98 LDPE film is selling at the $400 level, 90-10 at the $250-300 level, and baled PET bottles 90-10 within a range of $250-350. These prices primarily reflect domestic markets in Europe and the US, as they might be too high for Asian markets when considering the cost of freight and import fees added to the selling prices. There are fewer transactions observed for low-cost materials being shipped to Southeast Asian countries like Malaysia, Vietnam, Indonesia, and Thailand. The outlook for scrap plastics remains gloomy until the economic and overcapacity situations improve.

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