A rocky plastics market 'without firm orders'

Global: Many Chinese recycling players report that their import and recycling permissions were not renewed by the State Environmental Protection Administration of China, while some have been issued a license with a substantial reduction in quantity. This development is bringing additional pressure to Chinese scrap market as recyclers are struggling to buy plastic scrap.

Plastic scrap prices in European market kept on going downward due to less demand from Asian recyclers. In May, prices for LDPE fell by more than 10%.

For example, LDPE Natural film scrap was traded at EUR 400 per ton in the beginning of May and it reached to the level of EUR 350 by the end of last month.

NYMEX quoted crude oil prices reached to the level of US$ 51 per bbl. at end of May compared to the level of US$ 45 per bbl. in the beginning of May. While crude oil prices had jumped by more than 13% in the month of May still it could not support the plastics industry.

So far this month, there are no signs of change in the situation. Prices are dipping even more as material availability is steadily increasing.

Exports to other Asian countries improved but there is no big importer like China. Market sources say they have received ‘just inquiries without firm orders’.

In May, the main ports in China saw freight rates of around US$ 1400-1600. For the month of June, shipping lines are ready to reduce freight rates to China a bit more seeing as vessels have enough space and containers are well supplied.

Freight rates are expected to go down by US$ 200 this month.

 

The full market update provided by Surendra Borad Patawari will appear in the June issue of Recycling International.



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