Logistical Disruptions, Sharp Price Increases Define EU Recycled Plastics
There has been a notable shift in the European recycled plastics market during March, creating new market dynamics and emerging price trends for the year ahead, after a prolonged period of subdued activity.
The month was shaped by the outbreak of conflict between the U.S., Israel and Iran on Feb. 28 that disrupted supply chains and contributed to higher prices across several sectors and industries.
While the impact on the recycled market has been secondary to that of virgin polymers, market participants noted that recycled material has echoed the upward price movements seen in the virgin sector. Underlying demand remained weak, but climbing recycled plastic prices have prompted purchasing activity as this material offered a more accessible and affordable alternative to soaring costs of virgin product.
Supply-side pressures continued to drive European recycled plastic price gains in March. Logistical disruptions linked to the conflict in the Middle East led to the declaration of multiple force majeures, with companies citing difficulty fulfilling contractual obligations.
Customer letters seen by OPIS referenced Ravago’s European and Moroccan recycling facilities, Indorama’s polyethylene terephthalate (PET) supply in Poland and Lithuania, as well as sites across Europe for SABIC, LyondellBasell, Chevron Phillips, Orlen and TotalEnergies.
Restocking delays across the region
Meanwhile, a slow post-winter restocking period and a higher reliance on spot volumes has amplified tightness across the market.
“The conflict in the Middle East has enhanced issues seen in the market from the previous year. The slow market caused delayed restocking activity, producers were already low on inventories. So, now that the supply shock has arrived, everyone is subjected to the consequences,” one source told OPIS.
Price movements recorded by OPIS were significant for March compared to February. Recycled polypropylene black pellets rose by 14% to €875-885/mt DDP Northwest Europe (NWE). Recycled high-density polyethylene grey pellets increased 10%, natural pellets 9% and white pellets by 18% on month. Recycled
low-density polyethylene black pellets rose 20%, grey pellets 12%, while recycled PET transparent flake and pellet material increased 8-11% month on month.
This compares with more moderate price movements in February, when all of the recycled polymers OPIS assesses saw rises of between 1% and 4% from January.
“The market is chaotic. It is difficult to talk about an exact price level given the current volatility,” one recycled plastics trader told OPIS. Some sources have described this volatility as a market “awakening” after a prolonged lull.
Looking ahead, April is expected to bring further price gains and continued uncertainty, with supply constraints likely to persist as demand gradually picks up toward the warmer months and disruptions to supply arising from the Middle East conflict show no sign of abating. While some anticipate potential price easing in May following the end of a period of cracker maintenance in Europe, the majority expect prices to remain elevated through the summer.
“Even if the war stopped today, the time it would take to correct the supply disruptions would take at least 100 days,” one market source told OPIS.
Reporting by Ellis Nicoll, enicoll@opisnet.com; Editing by Rob Sheridan, rsheridan@opisnet.com