Market Update for Prime, Recycled, and Scrap Plastics
As of December 20, 2024
Prime virgin prices are sourced from major virgin polymer websites in China, quoted in Renminbi (RMB), inclusive of VAT. The exchange rate is 1 USD = RMB 7.2954.
Crude Oil Market
Crude oil prices closed in New York at $69.46 per barrel, reflecting multiple factors:
- The Federal Reserve’s cautious stance on interest rate cuts has heightened market volatility, as investors reassess expectations of higher borrowing costs.
- Forecasts for China’s demand, which may have peaked in 2017, and concerns over President-elect Trump’s proposed tariffs on imported goods potentially slowing international trade.
Prime Plastics Market in China
In China, prime prices have fluctuated within a narrow range of $20-50 per ton over the past two weeks. Key factors influencing prices include:
- Feedstock costs
- Production outputs
- Seasonal factors such as the upcoming New Year holidays
- Government stimulus programs boosting domestic demand
- Global market conditions, including geopolitical tensions and tariffs
Examples of Market Dynamics
- ABS: Prices have risen due to government subsidies and increased demand. While overcapacity persists, participants speculate prices have bottomed and expect a potential rebound.
- PS: Prices in RMB remain stable but have decreased in USD due to the appreciation of the US dollar.
- LDPE and PP: Prices are supported by feedstock costs, but additional capacities coming online are increasing inventory levels. Weak demand ahead of the Chinese New Year and LDPE offers from Saudi Arabia and the US at RMB 8,000 in Guangdong province are negatively impacting the market.
- PMMA: Prices remain stable, with production closely aligned with demand. Over the years, prices have increased from RMB 12,000 to RMB 18,000, making PMMA one of the best-performing resins.
- PC: Prices have risen by up to $50 per ton due to higher Bisphenol A (BPA) feedstock costs. However, market sentiment remains subdued.
- PA 6: Prices have dropped due to weak caprolactam costs.
- POM: Prices remain firm as suppliers aim to maintain current levels and prevent declines.
- PET: Prices remain weak, translating to approximately $800 per ton in USD. Overcapacity continues to suppress any price improvement.
- PVC: Prices have declined throughout 2024 due to weak demand, lower VCM and EDC feedstock costs, and poor market sentiment.
Recycled Plastics Market
The recycled plastics market is facing weak demand and low prices due to:
- An oversupply of prime materials, both domestically and through imports from Saudi Arabia, the US, and Europe.
- Depreciation of the Renminbi, which has fallen from $1 = RMB 7.0106 to RMB 7.70 (expected). This has led recyclers to hesitate in entering agreements without price adjustment clauses.
Market Insights
- LDPE and HDPE natural recycled pellets are trading at around $800 per ton, while black grades sell at $600 per ton, depending on quality. Lower-quality materials are priced around $500 per ton.
- Recycled PS and ABS are performing well in domestic electrical appliance markets and overseas (especially the US before the imposition of tariffs). ABS and HIPS compliant with REACH and RoHS standards are priced at approximately $900 per ton, depending on quality.
Scrap Plastics Market
The scrap market continues to struggle due to import restrictions and operational challenges:
- Thailand and Vietnam have made it nearly impossible to import plastic waste, except for downstream operations that turn recycled pellets into products exclusively for export.
- Many recyclers are relocating to Malaysia or returning to China to focus on domestic recycling.
Key Challenges
- Malaysia’s stricter inspection policies for imported containers to combat false declarations have increased delays and costs.
- Rising operational costs, the depreciating Renminbi, and increased financial risks are pushing recyclers toward potential losses.
Additionally, some recyclers supplying to brand owners at premium prices have been asked to temporarily halt deliveries due to quality concerns. It is speculated that low prices for prime materials are encouraging brand owners to use more virgin materials.