Recyclers are slowly getting the recognition they deserve as brands increasingly commit to using recycled plastics. But there is a long way to go.
The words ‘recycling’ and ‘sustainability’ were splashed across exhibition booths at the K Fair in Dusseldorf, the world’s largest event for the plastic industry. Generally, this October trade show is for those involved in raw materials, technology and machinery. This time, however, plastic producers presented themselves in such a way as to emphasise that their core business was recycling rather than primary plastic. Sustainability was the main theme and the word was on everyone’s lips. But it was overused and, in many circumstances, misused.
Despite this stress on recycling, the plastics industry has yet to grasp the enormity of the problem. The volume of plastics generated remains incredibly high. We generate about 300 million tonnes of plastics waste every year and, sadly, less than 20% is recycled. It will be almost impossible to increase the recycling rate of this huge volume to 50% in the next five years, a goal many of us are working for. Mechanical recycling cannot create enough capacity to absorb sufficient end-of-life plastics. Chemical recycling is at least five years away.
Prime or reprocessed?
One of the important outcomes of the fair is that the processors and converters started to understand the need for a disconnect between prices of reprocessed materials and those of prime materials. The volume of international trade in plastic scrap continues to shrink and I suspect that, instead of recycling worldwide increasing, the rate may have fallen in the last two years.
Some of the plastic producers are very serious and want to ensure their efforts are not viewed as ‘greenwashing’. They are showing commitment to changing their ways of working and ready to take steps either towards reducing plastic waste or improving collection systems. In any case, it was very clear that the moment has arrived for the recycling community to have the respect it deserves.
Prime plastic prices are still under pressure. Adding the new shale gas-based capacities means the supply of prime plastic will remain hitched to demand and prices could fall further still. There is not much demand from converters and, as we approach year-end, this will increase pressure to reduce inventories.
Low prime plastic prices make it hard for traditional European recyclers. They are no longer as competitive and find it difficult to sell recycled granules. The cost of production is very much fixed and they have little flexibility to reduce it. Prime plastic prices are so low that customers do not want to buy recycled granules. With low sales, many European recyclers have reduced production capacity.
Quality volumes down
We now have less good quality recycled granules on the market. Every week, a different brand owner promises to use a certain of recycled plastic in its packaging. If we fulfil all of these pledges, there will be a serious shortage of good recycled material available for these brands. In the long-term, we will need new recycling capacities. It is telling that most machinery manufacturers are booked to delivery new recycling lines in the next 12 months.
Secondary plastic prices in Europe are holding up despite the problems of exporting plastic waste. Less availability of good sorted waste is keeping prices stable. Unsorted material is a key issue around the industry.
Shipping freights from Europe to Asian ports have been stable in recent months. Lines are asking increases of US$ 150-200 for freight from Europe to Southeast Asian ports, citing less available space on their vessels.
Exporters were finding difficulty to get containers in November while in December, shipping lines were talking about a further increase of over US$ 200 for having to use low sulphur fuel. It remains to be seen how much of an increase they will achieve.
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