Prime virgin prices are from China’s major virgin polymer websites in Renminbi RMB. The exchange rate is 1 US dollar= Chinese Yen at 6.9643.
Crude oil prices closed at $71.02 per barrel in New York on Friday, Dec.9, a yearly low, on demand worries linger amid global complications. Oil prices level today depends on the economic recovery after China relaxed the Covid-19 policy, geopolitical situations with Russia regarding the sanctions of “oil price cap at $60”, and the global economic conditions.
Prime virgin resin prices have dropped slightly or remained at the same level compared to the recent slide in oil prices. China’s market is predominantly dominated by the shift of harsh zero Covid-19 policy; how worst is the surging of Covid-19 infections across the country as there would be a workforce shortage? Additionally, demands and prices depend on imports of prime materials dumped by excess stock from Saudi Arabia, the US, and Asian petrochemical countries. Since China is the most consumed and produced country of different grades of plastics, the country also exports thousands of tons of materials, like PS, PP, ABS, Nylon 6, LDPE, PET, and PVC. The low shipping rates make prices affordable for Europe, the US, Mexico, and other countries. The export business supports prime prices in China and bridges the gap between western countries and Asia market prices. In other words, there would not be too big changes and differences in global prices, as low shipping rates could move excess stocks around the world.
With the strengthening of the Renminbi by 5 percent and the relaxation of the Covid restrictions, importing recycled pellets from Southeast Asian countries is interesting again. The only drawbacks are that the Chinese New Year is around the corner, and most market players are cautious about replenishing their stock. However, market conditions are stable with positive sentiments as China’s exports would resume as the pre-pandemic situation with the government’s scheme to help export goods. Domestic demands will increase as the economy returns to normal after the lift of Covid restrictions. Recycled pellet trades depend on “recycled content” demands from brand owners and the competitiveness of recycled materials from the pelletizers. Recent collapses of prime prices and weakening demands for plastic scraps in developed countries would certainly increase supplies and options of feedstocks for recyclers in Asia.
Recently, more scrap plastics have been offered, particularly on post-consumer waste like PET, PE film, PP film, HDPE bottles and drums, all types of agricultural plastic waste, and mixed materials from different industries. Prices are much lower than a few months ago; PET bottles were at over US $ 900 per ton in July but now are around $ 300 FAS US major ports.PE Film natural was around $600 FAS per ton a few months ago and now is only $ 400 per ton. Mixed rigid plastic from municipalities is now at slightly over $200 level CNF Asian ports. These are some examples. Engineering plastic scraps are still in high demand; the challenge is a lot of them are sold in domestic markets, and recyclers in Asia for PC, Nylon, POM, PC/ABS, ABS, and PBT have problems matching their prices.
As we advance, since China is the second biggest economy, hoping that the ease of the Covid restrictions will bring us positive market sentiments for 2023.