Lower freight rates have been the only consolation for traders facing higher production and energy costs, coupled with stiffer competition from prime plastics.
Looking back, 2022 was filled with many challenges for economies around the world and much of industry. Secondary plastics was one such sector. The year began with stability and prices for plastic raw materials moving upward. Indeed, the entire plastic value chain for the plastic industry was positive and the upward trend continued during the first six months. Prices of different plastic scrap jumped by 20-25% during this period.
At the beginning of 2022, bales of LDPE natural film scrap were around EUR 490 per tonne and that had jumped to EUR 600 per tonne by June. Demand for plastic in the European recycling industry was good because of the increasing desire for recycled content in packaging material.
From the summer holidays until the end of 2022, many businesses stayed out of the market. Low consumption and high inflation drove economies to a standstill. Plastic scrap prices fell by more than 30% in this period from the peak prices in the middle of the year.
Prices of LDPE natural film in bales fell from the EUR 600 per tonne figure in June to below EUR 400 per tonne by the year end. Understandably, the industry had hopes of a more positive 2023 but its members were greatly disappointed.
At the end of 2022, NYMEX listed WTI crude oil price at US$ 80 per bbl. It fell to around US$ 72 in the first week of January. This steep fall of 10% in just one week had a negative impact on the market and prime plastic prices fell from their December level by EUR 70-80 per tonne.
Low prime prices kept the demand for recycled granules low and plastic scrap prices and demand both remained sluggish in January.
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