Prime virgin prices are sourced from major virgin polymer websites in China and quoted in Renminbi (RMB), with an exchange rate of 1 US dollar equaling Chinese Yen at 6.8737.
On Friday, April 14, New York oil prices increased to $82.52 per barrel due to various factors, including the International Energy Agency’s prediction of record demand, a tight supply outlook, and optimism surrounding China’s stimulus measures.
The surge in crude oil prices has increased feedstock costs for prime resins in China, but this price hike has not impacted prime materials. However, slow demand and weak prices, China’s loss of competitiveness to other low-cost production countries such as India and other Southeast Asian countries, reduced reliance on supplies from China by Western countries, negative impacts of geopolitical situations affecting capital investments in China, and declining domestic markets due to public concerns over spiking unemployment have caused a decline in demand for prime materials. Except for nylon 6, POM, and PET, which have experienced some stability in pricing due to the rise in oil prices, other plastics such as PP, PE, PS, ABS, and PC have remained within a narrow range.
Recycled materials remain at low prices, with recycled pellets being offered at prices below the production costs of many recyclers. Recycled pellets from various countries, such as Vietnam, China, Malaysia, Europe, and the US, are available in the market. While PS and ABS are offered at $900-1000 per ton, PE and PP recycled pellets are offered at $600-700 per ton. The costs of recycling plastic waste include collections, sorting, and separation, shredding and grinding, cleaning or washing, and pelletizing, which are higher than the selling prices of many recycled pellets. Thus, many recycled pellets are being sold at a loss. With prime virgin prices are so low, the competition hinders the use of recycled materials from prime resins, the failure of brand owners to fulfill their commitments to using recycled content, and the absence of a mandate to ensure compliance are the challenges of the industry. However, there is a growing awareness of the need to use recycled materials for environmental sustainability and reduce carbon footprints.
The market for scrap plastic prices offered from Europe and the US does not match the expectations of recyclers in Southeast Asian countries. Since China imposed a plastic ban in 2019, Chinese recyclers have moved to Southeast Asian countries. Extra costs of Import fees and freight charges need to be paid before exporting to China after recycling waste into pellets. Compared to India, Pakistan, and Turkey, they are more competitive as they import plastic waste and sell it directly in their domestic markets after processing. Furthermore, pelletizing factories have been set up in developed countries like Europe, Japan, and the US, pelletizing less labor-intensive plastic scraps and supplying them in their local markets. Only some specific materials like high-performance scraps, such as PPA, PPS, PEI, and PVDF, and some plastic scraps that require manual sorting for maximum efficiency economically and environmentally are still exported to developing countries. The quantities that remain for the local market are getting more in quantities, while the amounts for export are lesser and lesser.