Polymers
Overview
Global polyethylene (PE) and polypropylene (PP) supply and demand dynamics are in transition. Supply is increasing much faster than demand and international trade is shifting due to political and economic events. About 40% of the US polyethylene production is exported, mainly to Asian markets, whereas only about 10% of the polypropylene production is exported, mainly to LATAM markets.
Ethylene prices in Asia and Europe are tied to naphtha whereas ethylene prices in the US are impacted by natural gas and ethane supply. Asia is also self-sufficient on PP whereas they must import 25% of their PE demand.
The impacts of other ethylene and propylene derivatives such as PVC or propylene oxide also require assessment.
Our polymer experts will help you determine what trends to track and how to stay competitive in today’s ever-changing global markets.
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Tough UK recycling environment needs highlighting: BPF
Tough UK recycling environment needs highlighting: BPF
London, 10 January (Argus) — UK plastic recyclers, as with counterparts elsewhere, face a tough environment. Last year's change of government brought with a desire to focus on the circular economy, but directing policy to provide meaningful support to recyclers is a multi-faceted challenge. Argus spoke to Helen Jordan, sustainability manager at the British Plastics Federation (BPF), about the association's expectations for the industry and recommendations after the government recently outlined its position on mass balance for chemical recycling. Edited highlights follow: There's a lot of concern about the plastic circular sector economy in the UK, with some high-profile closures in the past 12-24 months. Should we be worried, and what can help put development of the industry back on track? There is concern over what's happening and the conditions that have caused the situation. We have just been working on a briefing document for government setting out that these closures are happening, and the issues that have led to them, such as the price of virgin material and the difficulty of competing against imports of recycled material and competition from plastic waste exporters. But I don't think it's all doom and gloom. The government should be looking at what needs to happen to prevent further closures, but I think we've still got a lot of scope to grow recycling in the UK. There is a focus in government around the circular economy, and I think this is a very good time to remind them of how important recycling in the UK is as part of that overall picture. I think government will be listening to those sorts of message, which is why we wrote this briefing document saying — among other things — there are problems with the Packaging Recovery Notice (PRN) system, and with how the Plastic Packaging Tax (PPT) has been developed, but we can put measures in place to change that. And I think if we can stop some of these delays in legislation and make sure it works for UK recyclers, there's still a great opportunity. The EU confirmed PPWR legislation in December and the Single Use Plastic directive will mandate recycled content in PET beverage bottles in the EU from next year. Is there willingness in the UK to develop similar requirements? We expect a lot of the impacts will roll into the UK because companies supplying the EU will need to meet EU requirements. EU demand for recycled material from the UK could also increase, because — unlike the PPT, where companies have the option to pay the tax and use virgin material — under PPWR recycled content is a requirement. This could also be seen as a risk to availability of recycled material for UK converters. But PPWR recycled content requirements will not come in for six years. I think there's still a chance for the UK to do something, potentially faster than the EU did, although we are not aware of anything in development. In the BPF's recent Recycling Road Map, you significantly reduce your estimate of how much chemical recycling would contribute to the overall picture by 2030. Why was that and what does it signify? When we wrote the first road map in 2020-21, we felt that our estimate for chemical recycling by 2030 was realistic and actually lower than what companies were saying they would be able to achieve within that timescale. But time has shown that we are not getting the commitment to investment in the UK that we were hoping to see, and we felt that we had to scale back expectations for 2030 because that's only five years away. Delays to rules around how mass balance accounting can be used to attribute chemically recycled content to count towards the PPT have been a big problem and that's why we've been pushing to get it dealt with. We must create the right environment so that people see it as a place to invest. Our hope is that the recommendation on mass balance from the recent consultation makes people start looking to the UK and seeing we've made a commitment to mass balance, which the EU hasn't yet. This might encourage companies to invest in the UK. You are referring to the government's recent recommendation for fuel use-exempt mass balance to be allowed for calculating chemically recycled content in the context of the PPT. What are the next steps in this? They say their intention is to use fuel use-exempt and there's been overriding support for mass balance in general. The biggest question from our members is the time scale for next steps. They are keen to work with industry to develop the next stage and work out how to put the plan in place. Questions around how certification would work and how mass-balance attributed ‘credits' for chemically recycled content could be transferred within companies need to be resolved. We are going to be working with HMRC to understand the detail and get involved in the next stage of developing legislation. At the moment there is no indication of a timescale. That will be our big question, because we need the reassurance it will happen, as this encourages people to invest. Was your members' reaction to the consultation universally positive? It was positive in terms of its aligning — in most cases — with what industry was calling for. We have always said we need chemical recycling to complement mechanical recycling and we need developments to infrastructure in both. There was always support for mass balance as long as that complementary element of it works. But the big questions are what's next and what's the time scale. Another element of the consultation response was recommending pre-consumer recyclates become ineligible for counting towards the 30pc threshold of recycled content above which the PPT does not apply. What has the reaction been to this and how significant do you think the impact might be? We are still developing a statement on this, but as you can imagine it's an area with mixed views. We don't think the timescale for putting this into practice would necessarily need to be aligned with confirmation on mass balance. Excluding pre-consumer recyclates might need to be a slightly longer journey and a phased approach might be necessary to support companies that invested in machinery on the basis that they were allowed to use pre-consumer recyclates to count towards their PPT threshold, and to allow development work in areas where you currently can't use post-consumer recyclates without challenges. We haven't got data from members saying how much of what counts towards meeting their 30pc comes from pre-consumer and post-consumer. It's likely that in some sectors, where using post-consumer is really challenging, people are using more pre-consumer. We're talking to our members to form a clear position on this. But a phased approach, not necessarily aligning to mass balance changes, seems to make sense because you won't be replacing pre-consumer content with chemically recycled content. It will take a long time to scale up chemical recycling, and you cannot expect to turn pre-consumer off and turn chemical recycling on at the same time. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: rPET demand robust but challenges persist
Viewpoint: rPET demand robust but challenges persist
London, 30 December (Argus) — Europe's plastics recycling market will be supported by legislation and voluntary recycled content commitment goals in 2025. But lower costs for virgin polyethylene terephthalate (PET) resin and competitive imports will likely weigh on the sector. Recycled PET (rPET) is a plastic made from recycled bottles, containers and PET waste, and is the material most commonly used by packaging manufacturers to help meet their sustainability goals. New EU legislation should provide a stable level of demand for the recycling industry in 2025, with the Single Use Plastics Directive (SUPD) coming into effect on 1 January. The directive mandates collection and recycling targets for all member states, requiring PET beverage bottles to have a minimum recycled content of 25pc. But there are some uncertainties that undermine the security the legalisation was intended to provide. The SUPD mandates recycled goals at member state level, and so the responsibility to purchase and use rPET at a premium to virgin PET resin has not yet been passed down to individual companies. Some pushback from market participants in the value chain, which will bear the burden of the premium cost for recycled content, is anticipated. Another issue is that the penalties for member states not meeting the set targets have yet to be communicated. The impact of the SUPD will not be fully felt in Europe's rPET market until the consequences for not reaching goals are clarified and systems such as extended producer responsibility schemes are implemented to ensure equal compliance. This is unlikely to be before the second half of 2026 at the earliest. Although many large companies and fast-moving consumer goods (FMCG) brands have already set voluntarily recycled content targets for beverage bottles that go above and beyond the SUPD requirements, the recycling market is under pressure from wider economic concerns. A recovery in consumer packaging demand in 2024 has not been enough to prevent some brands from switching to lower-cost virgin PET resin, a dynamic that is expected to continue throughout 2025. Meanwhile, some brands have omitted 2025 targets from their sustainability reports and have scaled back their ambitions. . Availability of high-quality PET bale, likely to be used in food grade applications, has tightened towards the end of 2024 and could tighten further at the beginning of the new year, supporting prices in the first quarter when collection volumes are seasonally at their lowest. Demand from preform and packaging manufactures should return for the peak season of packaging consumption from March onwards, but market participants expect it to be lower than originally projected for 2025. Recyclers are well stocked and, in some cases, oversupplied with flake and food grade pellet volumes as a result of low demand throughout 2024. There is likely to be some pressure on flake and food grade prices in the first quarter and margins for recyclers may continue to be slim. Converters and packaging companies closely monitored inventory levels throughout 2024, purchasing on a hand-to-mouth basis. If end use consumer demand is stronger than expected over the peak summer season, flake and food grade prices may find support as market participants restock, allowing recyclers to regain some margin. But European recyclers continue to be concerned about competitive imports, with many calling for a level playing field . Market participants are worried that if demand picks up and the market begins to tighten, imports offered at significant discounts to European material will undercut recyclers and again weigh on European prices and recycler margins. Although the outlook for 2025 is uncertain for recyclers, there is some quiet optimism. It will be a year of transition and adjustment as the market adapts to the legislative changes and tries to mitigate the challenges endured over the past few years. By Chloe Kinner Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Textile recycling can learn from packaging market
Textile recycling can learn from packaging market
London, 20 December (Argus) — The PET textile recycling industry can learn from the PET packaging recycling industry as it looks to scale up, with legislation and investment in collection and processing infrastructure key to increasing recycling rates, delegates at last week's Petcore Advancing Polyester Textile Circularity webinar heard. Supportive EU legislation is imperative to increasing collection and recycling rates for PET textiles, which currently stand at 20pc and 7pc, respectively, delegates heard. Presenters called for mandatory recycled content as requirements for textiles to stimulate demand and suggested that a ban on exports of unsorted textiles from Europe would create a more stable market and keep the feedstock within Europe. And it was suggested that this should be combined with harmonised extended producer responsibility (EPR) systems to provide sufficient financial support to expand collection infrastructure. And participants called for product design to better support the recycling industry. Transitioning to non-material fabrics rather than multilayer materials, and adopting digital marking for easy identification, could help streamline recycling processes, they said. Clear labelling regulations are also needed to ensure that materials can be easily sorted. Effective processing There is also need for development of systems to reprocess PET textile waste when collected, delegates heard. Recycling textiles is more complex than recycling packaging owing to the variety of materials, surface treatments, dyes, coatings, and prints used in garments as well the potential presence of hazardous chemicals. Mechanical recycling is effective for simpler materials, but it is limited by the complexity of many textile feedstocks, which makes chemical recycling a necessary complementary process. But depolymerisation-based chemical recycling — which is seen by proponents as a solution for tackling textile waste — is still in its early stages. The industry faces significant barriers to scaling up, including competition from low-cost imports, price sensitivity of consumers and brands, insufficient infrastructure, and high energy costs, particularly in Europe. Securing investment for industrial-scale depolymerisation projects remains a challenge. One large project has been shelved in Europe this year, while depolymerisation technology company Ioniqa filed for bankruptcy protection in October, citing low-cost virgin plastic alternatives, slow development of the plastic recycling supply chain and a lack of regulatory support, before announcing a comeback earlier this month. Bruno Langlois from Carbios, which aims to commercialise an enzyme-based chemical recycling process for PET textile waste, noted that downstream buyers will need to be willing to pay a premium for recycled material to support the development of the industry. He estimated that the total cost of a PET depolymerisation process, from collection and sorting through to repolymerisation and spinning of the material, could be as much as €2,600/t ($2,714/t), even at industrial scale, although he added that these costs could decrease as supporting infrastructure improves. These costs would likely only add around €1 to the price of each garment, he said, although experience from the packaging industry suggests that such high premiums to virgin PET on a per-tonne basis are still likely to be difficult for some buyers to countenance. Closing the loop PET fibre accounts for 57pc of worldwide textile production, which is projected to grow from over 120mn t in 2023 to 160mn t by 2030, according to the Textile Exchange association. Currently, around 12pc of PET fibre contains recycled material, the highest recycled content seen in textiles. But most recycled polyester is derived from bottles and therefore downcycled, resulting in less than 1pc of polyester coming from textile recycling. But, as regulatory mandates to use more recycled content in PET packaging increase, this risks limiting the amount of rPET available to fibre producers, delegates heard. This makes it essential that the industry can establish a closed-loop recycling system that decouples it from exposure to the PET packaging recycling market. The textile recycling industry has substantial growth potential, presenters said. By implementing targeted policies, improving infrastructure, and creating financial incentives, the shift toward circular textiles may become a reality. But overcoming technological, economic, and logistical hurdles will require co-ordinated efforts across industries, governments, and consumers to create a sustainable and circular textile economy. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Viewpoint: rHDPE packaging grade demand solid into 2025
Viewpoint: rHDPE packaging grade demand solid into 2025
London, 18 December (Argus) — A number of European recyclers report stronger demand for premium rHDPE BM grades heading into 2025, but prices and margins are likely to remain under pressure. European recyclers have endured well-publicised struggles in the past two years, but demand for rHDPE BM natural and, particularly, white grades has been the brightest spot for those operating in the polyolefin market in 2024. Prices have risen by 7-8pc over the year and — while some recyclers are keen to emphasise that contracting out their 2025 volumes has not been without its difficulties — many report that they have more orders for the coming year than they are able to supply. The closure of UK-based recycler Viridor's Avonmouth recycling plant , an rHDPE natural supplier, pushed some orders to other suppliers at the end of the year. But underlying demand also appears to be rising, and large packaging companies told Argus that they expect — based on forecasts from their customers, and with the caveat that these do not always translate into physical volumes — to be using more rHDPE in 2025 than in 2024. This shows brands are keen to further increase the recycled content of their packaging, and that many see rHDPE as a good category to focus on. But challenges remain, even for recyclers that are seeing a stronger demand outlook. Packaging manufacturers and brand owners have no legal obligation to use rHDPE in 2025, and there will be a limit to what they will pay for sustainable packaging materials. Fast-moving consumer goods (FMCG) brands' sales were hit by inflation in 2022 and 2023, and they remain cognisant of the need to find the right price point with their customers as volumes recover. As a result, decreases in the virgin HDPE market and the consequent widening of the rHDPE BM-virgin HDPE BM premium to its highest since August 2023 may become an obstacle to demand. Barring a sharp rise in crude and naphtha costs that underpin the European petrochemicals chain, Argus does not expects any major increases in HDPE prices in 2025. The potential for virgin prices to cap recyclate prices will remain for the foreseeable future. Some European recyclers are also concerned about import pressure, which is resurfacing after a lull linked to two periods of unusually-higher Asia-Europe freight rates in 2024. Asian rHDPE natural pellets have been offered up to €400-500/t ($419-$524/t) cheaper than the highest-priced European supply in recent weeks. And, although some buyers prefer the optics of supporting their regional recycling industry, or the opportunity to resolve quality issues more easily and avoid traceability concerns by working with local suppliers, this price advantage may encourage more to find import sources they are comfortable with. Recyclers also still need to find an outlet for their lower-value grades, from darker/coloured packaging grades down to grades that mainly sell into "cost-saving" markets such as pipe. A typical colour-sorting recycling process produces a range of grades, reflecting the combined natural, white and mixed-colour composition of standard HDPE packaging bales in northwest Europe. But finding a home for darker pellets can be difficult in the packaging industry, where buyers like to process white or natural grades with masterbatch colourants — concentrated pigments — to preserve the appearance of their products. And construction and industrial markets are depressed by the current economic environment and unlikely to buy large volumes unless recyclers can offer a discount to virgin material. Recyclers making premium HDPE grades may therefore feel more confident than those in other polyolefin markets heading into 2025. But until buyers are more accepting of a wide range of grades, or recently-confirmed legislation mandating the use of recyclates in polyolefin packaging kicks in, they will be under no illusion that the past few years' challenges can be consigned to the rear view mirror just yet. By Will Collins Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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