Prime virgin prices are from China’s major virgin polymer websites in Renminbi RMB. The exchange rate is 1 US dollar= Chinese Yen at 6.9994.
Crude prices rose in New York on May 27 at two month high of $115.07 per barrel. The soaring price is attributed to the ongoing Russia-Ukraine war, increasing demands ahead of driving season, and OPEC-plus are reluctant to increase enough outputs to meet market demands.
China’s prime prices have weakened despite oil prices increasing to a recent high. ABS, PC, PA 66, POM, and PVC are on a bearish note, whereas PE, PE, and PET soften on demand. Market players do not expect situations to change until the Beijing government relaxes the pandemic lockdowns, especially in Shanghai and its adjacent provinces, which account for 20 percent of the GDP, with Shanghai alone 10·17 %. A news release showed that some Shanghai suburbs would return to normal life after June 1. Hopefully, this will signify the end of the pandemic.
For recycled pellets in China, many factories have supply disruptions, workers cannot travel, factories shut down, logistic issues, and price drops. Recycled materials edge down for most general and engineering plastics. On the contrary, in South East Asian countries, Europe, and the US, markets remain very stable with intense demands for recycled content applications. There is a disconnect in prices between the West and East. PE and PP recycled pellets might sell for around $1000 per ton in Asia, while Europe and the US can sell for $1600 per ton or more. The gap will narrow once shipping rates from the East to the West reduce to the pre-pandemic level that excessive prime and recycled materials can export to the western countries.
In Asia, scrap plastics decrease supply due to negative margins. American and European suppliers of engineering plastics like PC, PC/ABS, NYLON, PMMA, and POM, are holding the materials either for local consumption or alternative export markets apart from Asian markets. More scraps offers are seen from North America to Europe and South America. For PP, PE, PVC, and PET, these materials remain in domestic markets as more recycling factories are built to supply different downstream market demands. Recyclers in Asia have to struggle for feedstock for their operations.