High logistics costs continue to dog global trade while EU traders await the new rules over exports to non-OECD countries.
Plastic scrap trade from the European Union to non-OECD countries remains subject to the temporary notification process. This is because the European waste shipment regulation 1418/2007 has yet to be amended and published by the European Commission. Implementation changes to the Basel Convention have been due since the beginning of the year and, in the absence of formal policies, plastic scrap exporters have had a hard time managing their business.
Turkey PE reverse
Turkey banned the import of PE in the middle of May, which added to the troubles of waste collectors, recyclers and exporters. The volume which had been going to Turkey could not be absorbed so quickly by any other country, especially when there were already other restrictions due to the uncertainties over the Basel Convention amendment. Prices of PE fell from between 10% and 30% depending on the grade and quality. Even so, materials started moving towards East Europe, a market not considered possible before because of transport costs.
In the middle of July, when the Turkish environment agency announced that they would again allow the import of PE scrap under certain conditions, the market sentiment became more positive. The agency had cancelled all previous licences to avoid non-recyclable and unsorted waste being imported into Turkey.
They resumed awarding licences to fully equipped companies after due diligence checks and taking some financial guarantees to ensure that only accredited recyclers should be able to import the raw materials. Prices of PE scrap surged by between 15% and 35% once the recyclers started using their new licences.
Due to lock down and low trade between countries, the logistics status quo was unbalanced and the cost of freight shot up. Freight got so high that for many commodities, they exceeded the value of the total cargo. Many business routes dried up due to high logistics costs. Freight from Asian countries to the USA and Europe rose by more than four to five times as a result and we heard reports of freight costing US$ 20-30 000 for a 40 feet container – a figure no one would ever have thought of paying.
Most of the current trade remains within-country instead of taking advantage of the free market. Shipping lines are not in the mood to talk about freight costs as even freight empty equipment is not sufficiently available.
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