Recyclers continue to suffer from low prices for virgin polymers which are hampering efforts to drive for more circular plastics.
Great efforts were made in 2023 towards sustainability and circularity in the plastic sector, particularly towards using recycled plastics in new packaging. As part of the momentum, brands promised to redesign their packaging with some even looking to reuse packaging to reduce the burden of recycling.
The major challenge was always going to be a constant supply of good quality recycled granules. The talk was of reducing prime plastic production and increasing the use of recycled plastics.
Plastics continued to be the pain point during discussions about sustainability at high-level meetings such as the Fortune Dinner and Davos sessions at Bloomberg House and Goals House.
After such discussions, it remains to be seen how all such interest can develop this year to establish sustainability goals.
Red sea effect
At the start of the year, prime prices in Europe jumped, said to be because of low availability in the market and the expected disturbance in the supply chain for shipments arriving from Asian countries and Middle Eastern producers.
The crisis in the Red Sea forced shipping lines to use the Cape of Good Hope, increasing the transit time and therefore costs. Delays in receiving prime plastic from elsewhere created a demand for goods already available in Europe so prices for all major polymers jumped by EUR 50-70 per tonne and are expected to rise further until the supply chain readjusts.
As sea freight to Asian countries became more expensive, prices fell in Europe. Plastic scrap prices corrected by EUR 20-30 per tonne in major grades of PE and PP due to the increase in sea freight. Demand from Asia was expected to improve once import licenses are renewed.