More woe heaped on markets

Even in Asia, the traditional outlet for plastic scrap, trade flows are being disrupted by low economic activity, tariffs and regulatory changes.

The global plastic waste market has remained stagnant over the past several months, weighed down by weak macroeconomic conditions and tightening waste management regulations. Slow global growth has reduced overall plastic consumption, leading to lower prices and muted demand from converters.

At the same time, cross-border waste movement has become more difficult, with many exporters facing challenges in complying with stricter regulations.

European struggle

In Europe, recyclers are struggling to sustain their operations under the current market pressure. Several facilities have shut down completely, finding it unviable to continue when recycled granules cannot even be sold at break-even levels.

Others are operating at reduced capacity, hoping that demand will improve soon. The situation is particularly challenging for independent recyclers selling granules into the open market. They face direct competition from virgin resin, which is widely available at low cost.

By contrast, recycling companies that are integrated with downstream product manufacturing are somewhat better positioned, as they can consume their own recycled granules internally and add value in the form of semi-finished or finished goods. Overall, market confidence in Europe remains weak, and recyclers are hesitant to commit to expansion or fresh investment in such uncertain conditions.

Flows disrupted

In Asia, which has traditionally been the main outlet for Europe’s plastic scrap, trade flows have been disrupted significantly. Exports to India remain restricted under the notification system, limiting participation to a small number of authorised exporters. In Vietnam, most recyclers’ import licenses expired on 31 July.

However, changes in local regulations created delays and prevented timely confirmation of new approvals. As a result, recyclers avoided booking shipments beyond the expiry date, leading to a sharp drop in incoming volumes. The issue is still unresolved, with new licences pending and supply chains disrupted.

Malaysia has also taken a stricter approach since 1 July, when amendments to its Customs Act banned the import of many types of plastic scrap. Under the new regime, imports are allowed only from Basel Convention countries or nations with trade agreements, and all shipments must be approved by Sirim, the national standards agency.

Importers and exporters must now comply with strict registration and inspection rules. These measures have already reduced the flow of waste into Malaysia, reshaping regional trade and forcing exporters to look for alternative destinations.

Tariff turmoil

Beyond regional policy changes, the global trade environment has been further complicated by tariff uncertainty. Ongoing US-led measures continue to inject volatility into international trade. The threat of higher tariffs or sudden changes in trade routes discourages businesses from taking long positions or holding significant inventory.

This caution has added further downward pressure on recycled plastic demand, already weakened by low economic activity and regulatory disruptions.Price movements in recent months reflect the fragile demand environment.

LDPE natural film has remained relatively resilient, with prices falling only modestly from EUR 390–400 per tonne in late June to EUR 370–380. Demand for this grade remains steady in both Europe and Asia, preventing a sharper correction.

In contrast, LDPE mix colour has collapsed with prices falling from EUR 120–130 per tonne to EUR 50–60 in just two months. This grade is heavily dependent on export markets and, with the current disruptions in Asia, there is little sign of recovery in the near term.

Uncertain outlook

Freight markets, in contrast, have been relatively stable. On many Europe-to-Asia lanes, excluding Pakistan, competition among shipping lines has increased with some carriers offering attractive freight rates tied to volume. This has provided some relief for exporters, even as the overall market environment remains difficult.

Looking ahead, the outlook for the plastic waste market remains highly uncertain. In the short term, demand is expected to remain weak as recyclers in Asia continue to face licensing delays and regulatory hurdles, while European recyclers remain squeezed by low-cost virgin resin.