Market Update for Prime, Recycled, and Scrap Plastics as of September 1, 2023.

Prime Virgin Polymer Prices are collected from major polymer websites in China and are quoted in Renminbi (RMB), including VAT, with an exchange rate of 1 US dollar equaling 7.2664 RMB.



Crude oil prices closed at $85.55 on September 1, 2023, surged to their highest point in seven months in New York. This increase is attributed to production cuts, signs of economic improvement in the eurozone, expectations of a pause in US interest rate hikes, and the possibility of China’s economic recovery.

Prime plastic prices have displayed notable uptrends: Polypropylene (PP) increase at $10 per ton, whereas POM has seen a substantial increase of $160 per ton. Conversely, materials such as Nylon and PET have remained relatively stable with marginal price adjustments. Notably, PET, PE, PP, and ABS have shown limited response to rising oil and feedstock prices due to sluggish demand stemming from various economic challenges. Demand continues to languish, primarily due to numerous manufacturers facing financial difficulties caused by China’s credit crunch, insufficient foreign and domestic investment, poor export performance, and a high unemployment rate, especially among recent graduates. Despite announcements of price increases by petrochemical companies, demand remains sluggish. Some factories in Guangdong have extended their closures until after the Chinese New Year in February 2024. To stabilize prices, petrochemical companies have resorted to production shutdowns and output reductions. POM’s recent price hike serves as an example of price manipulation through supply control, sparking concerns about long-term competitiveness. Restoring market confidence is crucial for China. While several material prices have witnessed significant increases, there has been no notable improvement in the overall order situation, indicating persisting challenges in the market.

Recycled material prices have not risen proportionally to prime prices due to negative market sentiments in China and the high costs of recycled materials. Downstream manufacturers lack incentives to incorporate more recycled materials into their products. China grapples with economic difficulties, with GDP growth predictions as low as 4.5% for 2023, a 0.3% YoY drop in CPI in July, declining exports and imports, surging youth unemployment at 46.5%, and reduced foreign investment. These factors underscore a severe economic crisis, prompting government measures to stimulate the economy. Demand for recycled pellets and price increases has not mirrored the trend of rising prime prices. Market participants should meticulously analyze whether price increases result from genuine demand or speculative attempts to inflate prices.

Scrap plastics have not paralleled the price spikes seen in prime materials, except for POM. Most general plastic scraps have maintained their previous prices. With the US and Europe resuming activities post-summer vacations, demand for scrap plastics has improved compared to June and July. Asian recyclers are grappling with meeting offering prices. Examples of price increases include CRV PET bottles (from 12 to 18 US cents per pound), HDPE mixed-color bottles (from 4 to 8 US cents), and PC bottles (selling at $940 per ton for Asia and over $1000 for the US domestic market). However, certain categories, like washed clean PP/PE regrinds, PP, or PE, continue to face low prices. Black recycled pellets are particularly affected, selling for less than $550 per ton CNF China main ports, compelling recyclers to offer lower prices for their feedstock materials. The consensus among market participants is that the market is unlikely to witness significant improvements in the next couple of years due to the ongoing challenges in the Chinese economy.

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