Recyclers see a downturn in plastics and paper markets

In the recovered or waste paper sector, prices for mixed papers have fallen significantly over the past month and look set to be at even lower levels in October.

The reduction will hit local authorities, in particular, the hardest as the prices have been high over the past year as mills sought to use mixed paper in cardboard production and others sought newspapers from the stream. The value of used cardboard is also reducing, although the grade is not being hit quite as hard as mixed paper and sellers are trying to maintain price levels or avoid large falls.

Recovered paper

Export markets are critical for the UK recovered paper as more than half the collected 7.5 million tonnes goes overseas as there is insufficient domestic demand. Prices for recovered paper are down because of several factors but as is often the case, the Chinese economy tops the list.

China, whose paper mills and packaging users are the main drivers of activity in the market, is seeing reduced overseas orders for new products and weak domestic demand. Inside China, retail sales have been low all year, even if there was a slight rise in August. Experts say that not even the Golden Week national holiday in October will boost demand as there is increasing nervousness around China’s property sector and ongoing Covid lockdowns.

Plastics

In the plastics market, prices have begun to fall quite considerably with certain grades such as mixed bottles – not helped by the reported closure of one major facility. Demand for raw material has fallen and virgin polymer prices have dropped, although the plastics PRN remains ‘very healthy’ at around £300.

It is expected that high energy prices and lower demand for finished products driven by the cost of living crisis will continue to put downward pressure on prices for recycled plastics. HDPE natural is the only grade which is holding up relatively well.

While the plastic packaging tax is boosting demand for recycled plastic content, the energy bill for the industry is causing problems. The trade organisation Plastics Recyclers Europe has warned that as the energy crisis deepens on the Continent, the repercussion on electricity prices is impacting on the operations of plastic recycling facilities and putting at risk the transition towards circularity.

Ref- Steve Eminton- Let's Recycle