Prime virgin prices for various polymers in China, quoted in Renminbi (RMB) and including VAT, have experienced fluctuations. The exchange rate remains at 1 US dollar equaling Chinese Yen 7.1729.
Crude oil prices closed higher at $82.82 per barrel in New York on Friday, driven by the extension of production cuts by Saudi Arabia and Russia into September. Additionally, the decline in U.S. inventory and anticipation of increased demand due to improved market sentiments have contributed to the rise in prices.
Some prime virgin prices, such as PS, PA6, and POM in China, have seen an increase primarily due to overseas demand. However, ABS prices have dropped significantly due to overcapacity, impacting its prices despite strong demands for export markets. Other materials like PP, PE, PET, PVC, PC, and PMMA have not responded as expected to increased crude prices and their feedstocks. The slow demands in China’s economy and reluctance to spend money by consumers, along with contracted overseas investments, have contributed to this situation. Western countries have also reduced imports from China for strategic and political reasons, and the government’s stimulus measures are yet to yield results. The property markets continue to weaken amid sluggish demand and lackluster growth. As a result, China’s export of overcapacity prime resins has dictated the global polymer market, leading to recent price drops on PS, ABS, NYLON, PET, and PVC. Low prices are becoming the new normal for China and the rest of the world, and the situation is expected to improve in a few years when global supplies adjust and balance their capacity.
In China, recycled pellets continue to be impacted by weak demands and the low cost of prime virgin materials. In addition to regular imports from Southeast Asian countries of LDPE for Film blowing, HDPE for extrusion, PP pellets for monofilament and injection, and styrenic materials and other engineering plastics for the automobile industry, more offers are being seen from the U.S., Japan, Europe, and Turkey at competitive prices to liquidate stocks. Examples include PS recycled pellets at US $500 per ton fas, PE pellets at less than $500 per ton fas, and PP/PE labels and caps at 450. All these prices are below costs due to low demands and competitive prime and off grade prices. The challenging market conditions have led to some recycling plants shutting down permanently and temporarily in the U.S., Europe, and Asia. However, new plants are coming online in preparation for the mandatory use of recycled content for packaging products starting in 2025. Market players predict that many recyclers may not survive before demands of recycled content come in to force.
Scrap plastics are widely available, and low-end materials requiring sorting, washing, and low recovery rates have no outlets. Some waste streams, including mixed bottles, low-grade big bags, agricultural waste plastics, mixed rigid plastics, PET clam shells, and mixed trays and pots, are being offered at zero price pick-up. These post-consumer waste streams have been sorted and baled. With no demand and negative prices, the next step could be discontinuing collection and sorting, leading to direct landfilling and incineration as solutions for these wastes. Increasingly, people recognize the need for the mandatory use of recycled content to support the recycling industry and environmental sustainability. However, due to the low prices of prime virgin materials, some businesses that had voluntarily committed to using recycled content are now switching to less recycled materials or opting for prime-only options. The recent collapse in PET and HDPE recycled content prices is an example of how regulations affect the use of recycled materials.