Lack of stability hampers trade

Consumption and demand levels are deflated with the uncertain economic outlook playing a big part in driving sentiment.

The European plastic market is moving without any clear direction in the absence of a stable economic outlook. Since the beginning of the year, most plastic-consuming industries have been without a clear forecast of finished product orders. In the absence of this demand, production facilities are running at minimum operational levels. High costs around Europe have also affected consumption habits and most waste management companies are saying there is less material in the market to be collected. 

Normally, where scrap availability is lower, plastic prices remain high. But this time, on top of the geopolitical issues in Europe and specifically the war in Ukraine, the demand for scrap from the international markets has also been quiet. The main reason for low demand has been a delay in the approval of licences from importing countries.

Countries such as Turkey, Malaysia, and Indonesia issue a yearly licence, mostly covering a calendar year, with recyclers required to apply for new licences just before their existing ones expire. In January and February, only limited numbers had achieved renewal with many recyclers awaiting licence approval.

The devastating earthquake in Turkey and Syria laid low the south-eastern part of Turkey which is a major region for importing plastic scrap. The whole region is at a standstill and trying to recover from its enormous loss. The absence of business activities in this area, until the situation gets normal, will affect the movement of scrap from Europe destined for this part of Turkey.   

India, where the shipment of plastic scrap from Europe can only happen under the notification regime, responded to the European Commission’s desire to restrict waste shipments originating from the EU. India is changing its views over plastic waste and the mindset of Indian bureaucracy is now moving towards more circularity. Whereas earlier officials were against the import of scrap, they now think it creates jobs and resources, hence the more liberal approach.

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