Prime virgin plastic prices are obtained from major polymer websites in China, quoted in Renminbi (RMB), including VAT, with an exchange rate of 1 US dollar equaling 7.2980 Chinese Yen.
WTI crude oil closed in New York on Friday, September 29, 2023, at $90.79, settling slightly lower due to macroeconomic concerns. However, it surged more than 30% in the last quarter of 2023 due to OPEC+ production cuts tightening global crude supply.
Prime resin prices in China have generally remained high, with ABS, PC, and POM seeing slight declines of over $50 per ton. These prices are sustained by rising feedstock values. China’s economic situation continues to weaken, marked by high unemployment rates and a decline in export and domestic demand, notably due to the property market’s collapse. This crisis is exemplified by the arrest of Evergrande Group’s chairman, the world’s most indebted property developer. This sector, comprising 26% of the economy, faces severe challenges, impacting China both socially and economically. Market participants express pessimism regarding China’s economic outlook, with many foreign companies seeking to relocate to countries such as India and Southeast Asian nations like Vietnam and Thailand. China’s vacant properties have reached staggering numbers, and with a declining population and falling prices, recovery may take decades.
Some recycled materials have mirrored the movements of prime resin, but market sentiment remains negative due to subdued demand. Most recyclers in Southeast Asian countries are developing their domestic markets while also exporting to Europe and the US, particularly washed PET flakes, fetching close to $1000 per ton. Recycled natural LDPE commands prices of $950-$1000 per ton in Vietnam, Thailand, and Malaysia, surpassing the prices if shipped to China. Recycled PP faces global pressure due to an oversupply of prime materials. China’s annual capacity exceeds 75 million tons, with more capacity expected online this year and next. This surpasses global demand. However, there is increased demand for recycled PC and POM materials, resulting in slight price hikes compared to three months ago, primarily due to rising prime material prices and overseas demand outside of China.
Low-end plastic scraps, such as MRP, B-grade big bags, post-consumer mixed-color PE film, 1-7 mixed plastics, and agricultural plastic waste with low recovery rates, struggle to find buyers. Some are sold at prices that barely cover baling, trucking, and shipping costs. Many household plastic waste items end up in landfills or are incinerated. Scrap PET bale prices have risen in the US, and demand has picked up as the market anticipates the mandatory use of recycled content for packaging in the EU and UAE, set to begin in 2025. Effective recycling of plastic waste and scraps hinges on mandates like EPR (Extended Producer Responsibility) that require the collection and use of recycled content. Prime materials remain attractive to brand owners due to their competitiveness and properties. That is why we need a mandate for the use of recycled content to save the world environmentally and the recycling industry.