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Plastic recycling growth masked by prices fall

Prices for mixed plastic bottles have halved in the past two weeks masking the more general growth the market is experiencing.

Recent price drops have been caused by an abrupt fall in demand from China and Europe as well as a sharp drop in polymer prices caused by the global economic downturn.

While mixed plastics in particular have dropped from £80-90 at the beginning of October to £40-50, a report for 2007 revealed longer-term European growth in material demand which outpaces gross domestic product.

This strategic market growth was identified in the report from the European plastics industry (comprising Plastics Europe, EuPC, EuPR and EPRO) called Compelling Facts about Plastic 2007.

It also found that plastic recovery is up to 50% across Europe and that quantities of mechanical plastics recycling had grown by 11%, with energy recovery up by 3% during 2006. The report said that growth was driven by increasing virgin material prices, improved collection and sorting technology, improved schemes and strong demand.

Recoup project manager Stuart Foster said: The report gives an overriding view on where the plastic market is heading. The current price reductions are quite sudden but I half suspect that the Chinese market will come back again.

Price changes happen in all markets, and prices have dropped for all commodities. But I think the plastics market will recover. If this [economic downturn] had happened six to 12 months down the line, UK food grade companies and other plastics process investors would have been up and running already.

Foster explained that once the UK infrastructure was online, UK market exposure to a global downturn would be reduced. He also said separated fraction prices arent moving as much, pointing to the UK facilities which are taking such material.

I dont want to call these price drops a glitch because we dont know how long the economic downturn will last. But I expect bottle prices to recover. When more of the UKs infrastructure goes online it will absorb the material, said Foster.

 

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