Prime virgin prices are sourced 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 7.3053.
Crude oil prices closed in New York on Friday, October 13, at $87.69 per barrel, marking a 5 percent increase from the Asian section due to supply risks arising from the conflict in Israel potentially spilling into the oil-rich Middle East region. The EIA has projected that fourth-quarter crude prices will remain at $90 and rise to $96 in 2024 amid global economic and political instability. Current oil prices are susceptible to manipulation by OPEC+ as they adjust production outputs among their members.
Prime plastic prices in China have fallen after the extended Golden Week Holidays, affecting general plastics to engineering plastics. Sentiments are growing negative due to worsening economic conditions in China with no signs of recovery in the near term, falling feedstock prices, unstable oil prices, and global geopolitical uncertainty. Some petrochemical companies have undergone shutdowns for maintenance, delayed new production capacities, and offered discounts to reduce their inventories. Spot prices continue to drop, and markets are expected to remain weak, with subdued demand and lower prices in Southeast Asia, including India. No single polymer is performing well after China’s national day.
Recycled pellets reflect market prices of prime resins with slow demand and bearish sentiment. The only difference is that some recycled pellets fall under the PCR program, unaffected by adverse market prices as their demand is guaranteed by brand owners participating in sustainability programs. Additionally, the mandatory use of recycled content is approaching in some regions, leading to increased purchases of PET and HDPE for packaging industries in the US, Middle East, and Europe. Individual manufacturers and brands may opt for recycled materials if they meet their mechanical and chemical requirements. Recycled materials are gaining popularity, but downstream customers are reluctant to pay higher prices than prime virgin materials. Japan supports the circular economy and sustainability strategies, but economic considerations may lead them to choose prime materials when prices are lower. A global mandate to use recycled materials would support the industry and the environment. More recycled pellets are available in the market for PE, PP, PS, and ABS, with many offers at negative margins due to low prime prices.
Scrap materials are generally cheaper compared to two weeks ago, except for PET bottles, HDPE bottles, and grade A natural PE film scrap materials. Post-consumer waste, such as mixed rigid plastic MRP, low-grade supermarket films, flower pots and trays, waste film from the agricultural industry, used mixed film, PP big bags, mixed production runners and lumps, and mixed floor sweeps, face challenges in selling to recyclers as the cost of processing exceeds their selling prices. Most recyclers prefer easy processing materials to avoid sorting and washing costs to remain competitive. Many recyclers lack profitable feedstock materials to sustain their production, leading some to scale down their operations, relocate to smaller and cheaper manufacturing sites, and save on expenses. Many are hopeful that the market will only see a turnaround when economic and political conditions improve in 2024 or when there is a global mandate to use recycled materials in the coming years