Market Update for the prime, recycled, and scrap plastics as of February 18, 2023.

Prime virgin prices are from China’s major virgin polymer websites in Renminbi RMB. The exchange rate is 1 US dollar= Chinese Yen at 6.8686.

New York oil prices closed on Friday, February 17, 2023, at 76.34 per barrel on mixed news of stock growth, economic data, and Chinese economic recovery.

Prime prices have been moving within a range of $50 per ton across the board, with the majority trending down. Petrochemical companies are experiencing over capacities and weak demands globally. Many shipments, especially PP and PE, are exported from the US, Saudi Arabia, and other countries that use China as a dumping ground for their excess stocks to avoid prices competing with domestic markets. Due to the low freight cost, China are exporting prime resins to Europe and the US, including Nylon, ABS, PS, PVC, and PET. The price gap between the West, like Europe and the US, and the East, like Asian countries, are narrowed after the reduction of freight costs, inflation, and increasing cost of energy. Market participants expect the problems of low demands and low prices will remain for some time until the stock of petrochemical companies and convertors is consumed to a reasonable level and recovery of the economy of China and the rest of the world.

Recycled pellet markets are still slow and impacted by the low price of prime virgin materials. The production of Post Consumer Recycled materials like PET, HDPE, LDPE, and Polypropylene has come to a situation where feedstocks and processing costs are higher than their selling prices. An example of these is PCR PP/PE pellets from Mixed Rigid Plastics from MRF, which are selling for $900 per ton, with the cost of collection, segregation, grinding, washing, and pelletizing well over their selling prices. There are recyclers in Asia, America, and Europe who cannot operate at break even or profit and are forced to reduce their production or close until the market has improved. For the same PP/PE pellets materials, the Asian market can only sell for $ 600 per ton to end users for non-PCR products. Surprisingly, [recycled content] pellets have also dropped so much that brand owners use more prime materials due to financial efficiency. It has been reported that some unscrupulous brand owners advocate using recycled content as their green sustainability commitment to target environmentally friendly products but choose to blend a high percentage of prime materials whenever their costs are low.

Scrap plastic materials are difficult to match prices between buyers and sellers as the cost of collection, separation, logistics, and shipping are high, and the recycled pellets prices are low. With PP, PE, PVC, and PET prime materials being around $1000 per ton, off grades are as low as 700-800 per ton, and processing costs and customs handling fees are often more than US$500 per ton, most recyclers are not able to operate to break even. Without a policy for the mandatory use of recycled materials, outlets for plastic waste are questionable; recycling industries cannot survive whenever prime prices are lower than recycled pellet prices.

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