Prime virgin prices are gathered from major virgin polymer websites in China and quoted in Renminbi (RMB), including VAT, with an exchange rate of 1 US dollar equaling Chinese Yen at 7.881.
On Friday, July 21, 2023, crude oil prices rose to $77.07 due to supply cuts, falling inventories in the US, and prospects of economic stimulus in China.
Prices for prime virgin ABS, PS, LDPE, POM, PET, and PVC have seen slight improvements in the last two weeks. These price increases are primarily supported by feedstock values and adjustments in production capacities. However, PP, PA66, and PA6 prices have remained relatively stable over the same period. Market players are concerned about disappointing economic figures that suggest situations may not improve in the near future, owing to high bankruptcy rates, spiking unemployment rates, poor domestic and export market demands, and low market sentiments. To avoid excessive import duties imposed by western countries and to explore new markets outside China, more manufacturers are reallocating their factories to South East Asian countries. Despite announcements of price increases by petrochemical companies, globally, resin prices continue to drop. The price gaps between western countries (Europe and the US) and China have narrowed for materials like PET, ABS, PS, and Nylon. The US polyolefin prices are quoted at $850 – 1000 per ton fas. In Europe, a market report suggests that “cheap Asian imports have dictated and disturbed Europe’s polymer prices,” as market participants had been experiencing steady and sustainable sales. The outlook for market prices depends on production cuts to balance demands.
Recycled pellet prices in China have remained mostly unchanged despite slow market sentiments, and downstream manufacturers are facing a lack of orders, especially during the low season until September. There is little room for price reduction of recycled pellets due to high processing costs and their feedstock value. As prime prices have reached recent lows, the gaps between prime virgin and recycled materials have narrowed, especially in the US and Europe. Surprisingly, post-consumer PET and HDPE in the US, which once sold for double the price of prime materials, have now dropped by more than half in just a few months, approaching levels close to prime virgin prices. For example, PCR HDPE natural pellets were sold at $1.30 per pound, around $3000 per ton in April 2023, but could now possibly sell for $0.70 cents per pound, equivalent to $1540 per ton for the August contract. Similarly, PCR PET natural regrinds for fiber, which were sold at $0.97 cents per pound (approximately $2100 per ton) last November 2022, can now only fetch half of those prices in July 2023. Some market players doubt whether the system for using recycled content has broken down, as manufacturers’ commitments to using recycled content seem to be merely slogans without actual implementation and enforcement on a global scale. While individual countries have their own regulations for using recycled materials in certain sectors and plastic products, there is a questionable outlook for the widespread use of recycled materials unless stakeholders collaborate on sustainability goals.
General plastic scraps in the US and Europe are quoted at their lowest prices in recent years. Curbside post-consumer materials, such as big bags, PET mixed bottles, low-grade PE film, and mixed rigid plastics, are currently seen at $50-100 per ton ex-work. Many recyclers in South East Asian countries have slowed down their purchases until the Chinese market improves. Consequently, more scrap materials are being shipped to other countries and recyclers whose pellets are not destined for China. India has become a prominent buyer of PE film and extrusion HDPE at better prices compared to South East Asian countries. Japan’s recyclers are also turning to India as an alternative market for their plastic regrinds and pellets instead of China. The prices of engineering plastics like nylon, polycarbonate, Pmma, and POM scrap remain steady, but they have seen a decline of $50 – $100 per ton across the board, impacted by reduced prices of prime materials globally. Many market participants are holding off on purchases until market conditions improve.