66 March 2016
M A R K E T A N A L Y S I S
Plastics
Closed: February 24, 2016
Some signs of renewed confidence
Recycling has become a tougher sell as oil prices con-
tinued to drop this year. The decline dragged down the
price of virgin plastic, erasing the recyclers’ advantage.
The New York Mercantile Exchange (NYMEX) has said that WTI crude
oil prices fell by more than 27% from
US$ 36 per barrel in the last week of
December to US$ 26 in the first half of
January. This led to a drop in LDPE film
scrap prices of 5-7% in the correspond-
ing period. The subdued demand has
also been impacted by the Chinese New
Year celebrations starting on February
8. All suppliers start to wind down their
operations one or two weeks in advance
– so much so that they put a halt to
mass production far earlier than many
buyers anticipated. The ramifications
are being felt far and wide. In Europe,
exporters delayed sales of plastic scrap,
expecting an upward movement in pric-
es after the Chinese New Year holidays.
In the local market too, recyclers held
on to their stocks and thus restricted
any price movement. Most recyclers car-
ried a full inventory, postponing their
deals to February.
The Asian plastics scrap market wit-
nessed weak trends in January, with
low demand for reprocessed material.
The Chinese New Year celebrations had
a major impact on price movements,
enforcing an undeclared shutdown of
the supply chain. However, following
these holidays in February, oil prices
rebounded to US$ 33 per barrel to bring
greater stability to plastic scrap prices
and to build some confidence among
buyers. Chinese customers also came
back to the market after the holidays,
leading to some movement in scrap
prices (LDPE film scrap went up by Euro
15-20 per ton). Asian prime prices also
saw some improvement, hinting at a
revival in plastic scrap prices too. The
European Commission has sent a com-
munique to non-OECD countries to
handle exports of ‘waste’. In its Note
Verbale, the Commission’s directorate
general for trade has sent a question-
naire to these non-OECD countries to
find out what recyclable waste materials
can be sent to them from Europe. This
may be ineffective as some countries
may not understand it properly, mak-
ing the assumption that Europe is using
their territory as a dumping ground. As a
result, they sometimes choose to refuse
imports of such ‘waste’.
Advance beyond burn-n-sni with the new PolyMax™ Plastics
Analyzer, for laser-accurate chemistry readings of light and dark
plastics with point-and-shoot ease.
V I S I T T S I . C O M / P O LY M A X T O S I G N U P F O R A D E M O .
