New regulations have had a profound effect on markets with traders cautious as the EU export regime beds in.
The European plastic recycling market experienced a significant transition in April and May, moving from a short-term recovery into a new regulatory environment expected to reshape trade flows for the remainder of the year.
While market sentiment improved temporarily at the end of March and early April following the reopening of Indonesian import licences and stronger export demand, the introduction of new European waste shipment controls from 21 May created fresh uncertainty and prices collapsed in mid-May.
During April, exporters across Europe accelerated shipments to non-European destinations ahead of the upcoming regulatory changes. The limited time window before the implementation of the new notification requirements resulted in increased buying activity for export-grade materials.
This pre-deadline rush helped reduce inventories that had accumulated during the first quarter and provided temporary support to prices. Many exporters focused on maximising shipments to Indonesia and Türkiye, the two most active destinations for European plastic waste during this period.
‘HORMUZ FACTOR’
Within Europe, the underlying fundamentals of the recycling industry remained challenging. Demand for recycled granules stabilised due to high prime plastics prices across the globe. The war between the USA and Iran escalated oil prices due to the closure of the Strait of Hormuz.
Prime plastic prices reached almost double the prevailing prices at the beginning of the year, boosting recycled granules but prices did not soar to match the hike in prime plastic prices.
Recyclers were happy to have some demand and movement of recycled granules. Many converters remained cautious in their purchasing strategies due to uncertain economic conditions. They suspect the increase is temporary until the prime prices get back to the normal level.
There is no boost in consumption, which should give them a stable platform of firm demand in long run.
SHIPMENT REGS
The most significant development occurred on 21 May with the implementation of the new export notification requirements under the revised European Waste Shipment Regulation.
The introduction of additional administrative procedures for exports to both OECD and non-OECD destinations has fundamentally altered market expectations. From that date there was a full stop on the export of plastic waste from Europe.
Exporters registered notification files with the competent authorities and were waiting for replies from destination countries. Without positive replies, they cannot ship waste from Europe.
As a consequence, many market participants anticipate a temporary slowdown in export volumes during the adjustment period while authorities and businesses adapt to the new system.
CAUTIOUS APPROACH
The immediate impact of these regulatory changes has been a more cautious purchasing environment. Exporters who aggressively shipped inventories during April have become more selective, awaiting greater clarity regarding notification processing times and practical implementation.
This has resulted in reduced buying activity for certain grades, particularly lower-quality materials that depend heavily on export outlets.
Market participants are closely monitoring how efficiently competent authorities process notifications, as delays could significantly influence trade flows and pricing during the second half of the year.
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