UK rPET industry must grow to meet brand demand
Consumer giant Nestle's recent announcement that it had reached 100pc recycled PET (rPET) content in all of Buxton water brand UK bottles is another sign of rampant competition for recycled content in packaging, and raises a question over whether supply can keep up with the growing demand.
Many companies and brands in the UK fast-moving consumer goods (FMGC) sector are aiming to increase recycled content in plastic packaging. Some, such as Buxton and Japanese firm Suntory's blackcurrant drink Ribena, as well as all Coca-Cola Great Britain's smaller bottles, have scaled up quite quickly to 100pc recycled content. But trade association the British Plastics Federation (BPF) estimates the current average level of recycled content in the UK PET bottle market is just 15-20pc, and space for others to scale up their use of recyclates is ever more limited.
The BPF's Recycling Roadmap finds around 350,000t PET bottles were placed on the UK market, and environmental non-profit Recoup estimates around 75pc of these were collected for recycling. This is consistent with Argus estimates of an around 87.5pc operating rate of at the UK's 300,000 t/yr of PET recycling capacity. The average 'process loss' during PET recycling in Europe is around 30pc, according to Plastics Recyclers Europe (PRE), meaning rPET output capacity is a little over 180,000 t/yr, or enough for a little over 50pc of bottles put onto the market.
The need for special certification for food-contact applications is a major bottleneck to supply, with just 30,000-35,000 t/yr of production capacity for food-grade rPET pellets in 2020 according to the BPF Recycling Roadmap, although this is likely to have risen.
The UK's implementation of a £200/t ($250/t) tax on all plastic packaging with less than 30pc recycled content may add complications, because this applies to PET applications outside of the bottle industry, particularly trays. The UK PET tray market was nearly half the size of the bottle market in 2019, according to BPF data, but tray-to-tray recycling, which would create an rPET stream specifically aimed at non-bottle applications, has still to develop.
Scope for rPET imports is limited, given tightness in the European market and with the EU Directive on Single-Use Plastics (SUP) setting out an obligation for PET bottles to include 25pc recycled content by 2025. Meeting this probably means including more than 25pc rPET given the comparative difficulty of sourcing food-grade recycled polyolefins for caps and closures.
The more than 3mn t of PET bottles placed on the European market in 2020 suggests Europe-wide demand for food grade rPET would easily exceed 1mn t by that 2025 deadline. Latest data from PRE show just 632,000 t of rPET pellets manufactured in 2020.
Nestle Waters UK head of corporate affairs and sustainability Hayley Lloyd House told Argus "there is higher demand than ever across many industries for recycled PET plastic, and the volume PET plastic collected for bottle recycling is not keeping up with that demand." She said a Deposit Return Schemes (DRS) "is the best solution to increase bottle collection rates, whilst helping to improve the quality of recycled PET."
Successful DRS schemes can increase collection volumes and the quality of waste streams, reducing process loss at the recycling stage and easing the process of food-grade certification. This would help to ease the shortfall, but significant investment would also be needed to increase reclamation and reprocessing capacities to produce enough recycled material to reach and sustain recycled content ambitions in the UK plastic packaging market.
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India launches anti-dumping probe into s-PVC imports
India launches anti-dumping probe into s-PVC imports
Singapore, 27 March (Argus) — India has launched an anti-dumping investigation into suspension polyvinyl chloride (s-PVC) imports originating from China, Indonesia, Japan, South Korea, Taiwan, Thailand and the US during October 2022 to September 2023. Three out of five Indian s-PVC producers have filed an application to investigate potential dumping of s-PVC imports into India. The Ministry of Commerce and Industry (MCI) issued a notice on 26 March announcing the launch of the investigation. The investigation primarily revolves around PVC grades manufactured from a suspension polymerisation process, which are typically considered general-purpose grades across global markets. The investigation does not include cross-linked PVC, chlorinated PVC, mass PVC or paste PVC. MCI has already announced an anti-dumping investigation into paste PVC imports in October 2023. Applicants have also requested for a retrospective imposition of potential anti-dumping duties, saying that there is a clear history of s-PVC import dumping from the above mentioned origins since the expiration of previous anti-dumping duties on s-PVC imports in February 2022. Upcoming capacities and import barriers India has around 1.6mn t/yr of domestic PVC production capacity as of 2023, according to Argus data. India also imported 3.2mn t of PVC from various origins last year, with the largest growth in supplies from China, northeast Asia and North America. This was mainly attributable to rising PVC demand in India following continuing government incentives to boost construction and agricultural activity in the country, with both industries heavily reliant on supply of PVC pipes. Furthermore, the Indian market is readying itself for the addition of new chlor-vinyl production capacities in coming years, with an aim to bring total nameplate PVC capacity in India to 3.8mn t/yr as of 2028. Indian authorities have already announced several measures targeted at controlling the flow of PVC imports into India as a result. Fresh anti-dumping investigations have started after India's ministry of chemicals and fertilizers announced BIS quality restrictions on PVC and PP imports in February. A delay in some Indian PVC capacity start-ups remains plausible, but new production in the country will likely limit incremental PVC imports in the coming years, or at least prevent them reaching record-high levels as in 2023. By Michael Vitiello India PVC imports '000t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Baltimore bridge collapse forces freight changes
Baltimore bridge collapse forces freight changes
Washington, 26 March (Argus) — Vessel traffic in and out of the Port of Baltimore, Maryland, has been suspended indefinitely in the wake of a container ship collision early today that brought down the Francis Scott Key Bridge, an accident that will force the rerouting of coal, car and light truck shipments. The prolonged closure of one of the largest ports on the US east coast could have a ripple effect on trade flows across much of the US, as shippers grapple for alternatives in the absence of a certain reopening timeline. Search and rescue efforts are still ongoing in the Patapsco River, after the 116,851dwt Dali headed to Colombo, Sri Lanka, slammed into a bridge support. The crew had lost control of the vessel. The Dali is owned by Grace Ocean and managed by Synergy Marine Group. The Maryland Port Administration said it does not know how long it will take for the shipping channel to be cleared and for traffic to resume. Shipping companies are bracing for a closure of at least two weeks, but many expect the clean-up effort could take significantly longer. President Joe Biden vowed the federal government will provide whatever resources are needed to get the port "up and running again as soon as possible." The port is a major trade hub for steam and coking coal, automobiles and scrap metal. Many market sources are still trying to determine whether the disruption will be dramatic enough to move prices. But coal markets were already being affected today. Baltimore is home to two key coal export terminals: eastern US railroad CSX's Curtis Bay Coal Piers and coal producer Consol Energy's Consol Marine Terminal. The facilities are upstream of the bridge, meaning ships will not be able to serve them until the route reopens. The terminals handle thermal and coking coal from Northern and Central Appalachia. They have a combined export capacity of 34mn short tons (30.8mn metric tonnes). The two terminals loaded 2.4mn t of coal in February, up from 2.1mn t a year earlier, according to analytics firm Kpler, mostly exports to India and China. An India-based trader said that the suspension of coal exports will probably raise prices in India, as brick kilns enter the peak production season in the summer. Buyers could look to petroleum coke as a substitute, but the higher sulphur content may not be appealing to some users despite the higher calorific value. Prices for deliveries to northern Europe are also likely to rise given that the Netherlands, Germany and Belgium combined are the second-largest market for North Appalachian coal. April API 2 futures rose by $2/t to $113.30/t. The incident has added a "level of volatility [which] could have big implications," a European paper broker said. The lack of information has prompted some coal producers to hold off on activating force majeure clauses in their contracts. Curtis Bay is served only by CSX, while CSX and fellow eastern carrier Norfolk Southern serve Consol. CSX said it is in contact with existing coal customers and contingency plans are being implemented. The railroad at this point intends to keep Curtis Bay open but will continue to assess the circumstances moving forward. Norfolk Southern did not respond to questions. Some scheduled Baltimore coal exports may be redirected to the other three eastern US coal export terminals in Hampton Roads, Virginia, but such reroutings likely will entail increased costs. Not all coal mines will be able to shift terminals. Such decisions will depend on available capacity in Hampton Roads. Exports from the three terminals in January reached a five-year high , signaling somewhat limited capacity. Mine location and railroad access may also determine whether coal can be rerouted, an industry source said. But some producers do not have much of a choice about trying to send coal to Hampton Roads. They may need the cash so will be forced into a decision. The producers most vulnerable to delays may be Consol and Arch Resources. Arch's Leer coking coal mine may be in the best position because it co-owns Dominion Terminal Associates in Hampton Roads with Alpha Metallurgical Coal Resources. The sudden lack of export capacity could put a floor under US coal prices, which have mostly been falling since last year amid low domestic demand. The competition to replace Baltimore coal exports could prevent further cuts, another coal trading source said. Metals sources say the accident will have only isolated effects on the global ferrous scrap market, but many market participants are still assessing the situation. The port is the 10th largest ferrous scrap export port in the US, and over the last five years an average of 44,000 metric tonnes/month of ferrous scrap was exported from Baltimore, according to US Department of Commerce data. But the port closure is likely to affect other freight. Baltimore is the nation's top handler of automobile traffic. Motor vehicles and parts accounted for about 42pc of all Baltimore port imports and 27pc of all exports, according to state data. The Port of Baltimore handled 847,158 cars and light trucks in 2023. "It's too early to say what impact this incident will have on the auto business — but there will certainly be a disruption," said John Bozzella, chief executive of industry trade group Alliance for Automotive Innovation. Dry bulk freight rates likely unaffected Several sources told Argus Baltimore's closure is unlikely to have a major impact on dry freight rates despite short-term interruptions to coal transports. "We are in the shoulder months with less demand for thermal coal," a shipbroker said, suggesting mild global temperatures means the collapse "may not have too much of an impact" on freight markets overall. Vessel traffic in ports such as Charleston, South Carolina, and Savannah, Georgia, may increase on diversions from Baltimore. Kpler identified 17 vessels that will likely be impacted because they are either in the Port of Baltimore or were expected to load there in the coming days. By Abby Caplan, Gabriel Squitieri, Luis Gronda, Evan Millard and Brad MacAulay Port of Baltimore coal terminals Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US March PGP contract settles at 1-year high
US March PGP contract settles at 1-year high
San Antonio, 25 March (Argus) — The March contract for US polymer-grade propylene (PGP) settled higher by 3¢/lb at 58¢/lb, its highest settlement since March 2023. The year-high settlement came in the wake of two planned turnarounds at on-purpose propylene producing units that kept supply tight. Dow's 750,000 metric tonne (t)/yr propane dehydrogenation (PDH) unit in Freeport, Texas, returned to operations two weeks ago after being down since 2 February. Enterprise's 750,000 t/yr PDH-1 unit in Mont Belvieu, Texas, began its 70-day turnaround on 10 March. With the near-term supply tightness, US spot PGP for March delivery traded as high as 60¢/lb at the start of the month, the highest spot trade since March 2023. It since declined to trade at 52¢/lb on 22 March. The US PGP contract has not decreased since August 2023, when it declined by 0.5¢/lb to settle at 34.5¢/lb. The last time the monthly contract settled higher than 58¢/lb was May 2022 when it settled at 61¢/lb, when global oil prices were elevated in the wake of the start of the Russia-Ukraine conflict. By Michael Camarda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Svitzer to field test MAN methanol engine
Svitzer to field test MAN methanol engine
London, 25 March (Argus) — Danish tugboat operator and Maersk subsidiary Svitzer will conduct a field test on the dual-fuel methanol MAN 175D engine on a newbuild tugboat under an initial agreement. Svitzer had opted for the MAN 175D diesel engines to be installed on newbuild tugboats last year, and is now working with German manufacturer MAN Energy Solutions on the development and use of a dual-fuel version of the engine — which will be methanol compatible. Svitzer's parent shipping firm Maersk currently has two methanol-fuelled vessels — the Laura Maersk and the Ane Maersk — and has another 23 on order, along with offtake agreements for green methanol. Argus assessed the price of grey methanol on a dob Rotterdam basis at an average of $722.26/t very-low sulphur fuel oil energy density equivalent (VLSFOe) in March, a discount of just under $48/t to marine gasoil (MGO) — which is typically the fuel of choice for tugboats operating in northwest Europe. But the price of biomethanol on the energy density equivalent was at $2,256.22/t, a premium of over $1,486/t to MGO. Maersk expects biomethanol to reduce lifecycle greenhouse gas emissions by about 65pc. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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