Prime virgin prices are from China’s major virgin polymer websites in Renminbi RMB. The exchange rate is 1 U.S. dollar= Chinese Yen at 6.8280.
Crude oil prices closed in New York at $73.77 per barrel, a little change as the market balance a weaker U.S. dollar and the global economic recovery.
The prime virgin prices in China continue to be impacted by the clouded near-term economic outlook resulting from the surging Covid-19 infections. With China underplaying the outbreak of new variants, scientists suggest that the number of infections is over 30 million per day. While China reported three new Covid-19 deaths in the mainland on Jan.6, the British-based Airfinity forecasted that over 10,000 people would die each day, prompting global concerns. Japan, the US, Italy, India, the UK., Thailand, and Taiwan are among the countries that require a pre-departure negative test for passengers traveling from China. Economic activities are the slowest for years as the virus sweeps across the country, prompting people to stay home. Additionally, nearly all factories are closed for the Chinese Lunar Year holidays. Market demands for different prime materials remain slow for a few weeks until the beginning of February.
Demands for recycled materials in China slowed following the new surge of Covid-19, crippling factories and ports. Factories cannot complete orders, with 1/2 to 2/3 of workers being infected. For the Shanghai port, the world’s number container port, cancellations are increasing as many factories cannot operate properly due to many workers getting infected with Covid. However, there is an expectation of a soft pick-up in the business after the Lunar New Year. Most recyclers diversify their markets to south Asian countries to avoid putting all eggs in a basket. As prime prices continue to drop, recycled materials are following in the footsteps of prime prices. Some Asia recyclers can buy their scrap feedstocks relatively cheaply amid continuing downward adjustments of prices from the US. and Europe. Recyclers outside China operate during the Chinese New Year; their workers are locally hired. Recycled pellet markets in Southeast Asian countries are relatively stable, with slight downward pressure on prices impacted by the downtrend of global prime prices. Over capacities of prime materials, especially PP. and PE. in China for 2023, recycled materials will be cautiously forecasted at present levels due to new productions and gloomy economic conditions.
Scrap plastic material supplies are relatively stable for Asia recyclers as more offers are available for post-consumer recovered feedstocks. PE film, mixed rigid plastic, agricultural plastic waste, and PP Big bags are on the list. The only challenge that recyclers and exporters face is price matching due to the high cost of logistics, shipping freights, and customs clearance handling fees. Some scrap materials like PC. regrinds, ABS regrinds, PC/ABS regrinds, POM, PET, PA regrinds, and PMMA regrinds are still under pressure for prices for Asian recyclers as developed countries sell within their domestic markets. Asia recyclers can only buy materials that need sorting, washing, and processing before pelletizing. These contaminated materials are relatively economically efficient for processing in Asia due to the infrastructure and availability of labor. The most important factor for a recycler to survive is supply chain sustainability which can keep the production running to maintain the overheads and make a profit.