The recovery of the global economy during 2021 has been stronger than expected and has helped the plastics recycling industry show a very strong first half to the year, according to a leading expert on the sector.
The upbeat summary comes from Henk Alssema, who chairs the plastics committee of the Bureau of International Recycling in the organisation’s latest quarterly Mirror. He says recyclers are ‘very optimistic despite a number of issues such as a lack of input material and problems in the transportation sector’.
Commenting on specific polymers, Alssema says the European market for recycled LDPE and PP are both strong. But recyclers are struggling with regard to availability of input material.
‘Container shipping is still a problem owing to the recovery of the global economy,’ he notes. ‘There has been huge demand since the second half of last year, especially from the USA, and this boom is still not abating. This has led, and is continuing to lead, to a growing discrepancy between the number of incoming ships and the unloading/loading capacities of the ports and the entire logistics system in the hinterland. Effects include delays and an extreme shortage of containers.’
Steve Wong, executive president of the China Scrap Plastics Association and a BIR board member, is less positive about the Chinese market, saying ‘the outlook for the recycling business appears set to remain gloomy for some time’.
He notes hortages of scrap plastics amid price differentials between what recyclers in the Far East can offer and what exporting countries’ processors can pay. Prolonged logistics problems are slowing the movement of materials from exporting countries to Asian recyclers, he adds, and many factories have shut down temporarily.
‘The challenges faced by downstream manufacturers remain substantial with shipping costs and availability of vessel space for export markets on one side and, on the other, weak domestic demand partly due to seasonal and economic conditions. Trade is being impacted by excess supply, a downtrend in feedstock prices and the geopolitical situation in China owing to the possibility of sanctions from the USA and Europe on exports of some finished products.’
Wong also notes that China has lost market share for the importation of recycled pellets with recyclers selling their reprocessed LDPE domestically in Indonesia, Vietnam, the Philippines and Malaysia. There has also been a trend for recycled pellets being sold by developing to developed countries because of the growing requirements for recycled content in new plastic products.
Fellow board member Max Craipeau, chairman of Greencore Resources, reports on Turkey’s decision to reverse an import ban on scrap plastic imposed in early July. ‘Intense lobbying by the plastics industry followed this announcement and now the Turkish government has made a u-turn only two weeks after the ban’s implementation,’ he says. ‘There may be some limitations on what Turkish recyclers will be able to import. Basically, however, most import licences are being renewed.’
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