This has been one of the most interesting six months in the history of plastic recycling.
The start of the year saw the Chinese introduce a ban on almost all plastics imports, apart from the tiny amount allowed from rejected manufacturing materials. This was followed a few months later by the news that these too will be banned by the end of this year.
This has meant that many exporters have had to find alternative outlets for their materials. Destinations such as Malaysia, Vietnam and Indonesia have seen increases in exports while, closer to home, Poland and Turkey have also been a focus.
But we are increasingly seeing these countries react against the increased volumes of material they have been receiving. Shipping lines and exporters to Vietnam, for example, have taken it upon themselves to suspend plastic exports to the country temporarily, as the local recycling industry struggles to cope with the volume. It has also been reported that more than 9,000 containers are awaiting pick-up from the dockside at two ports as infrastructure has battled to cope.
Those looking to Indonesia instead will find that it has 100% inspections of plastics at the point of container load, which means the inspection agency, shipping lines and the site must all be coordinated to work together. This, of course, provides extra logistical challenges and makes it a tricky destination.
Poland has announced that it intends to introduce regulations on waste imports, blaming a series of fires at waste and recycling storage facilities in recent months as a direct consequence of the Chinese ban.
It is true that most plastic grades, with the exception of poor quality films and mixed rigids, have been finding markets. But import restrictions could make this more challenging in the coming months.
Here at Vanden Recycling, we are confident we will be able to move material because not only do we have our own recycling facility in Peterborough to ensure we can deal with material in the UK, but for the plastics we do export, we ensure they are of the highest quality and our people on the ground in Asia are aware of local market requirements.
What the import restrictions will mean for market conditions during the coming months is difficult to say. But the past six months has certainly seen some improvement in price for many materials.
Packaging grades have been supported by a PRN/PERN price that has been regularly above £60 per tonne, and remained so at the time of writing. This has helped to keep UK material moving, but a lower PRN/PERN price would make it harder to move. Packaging grades have also benefitted from recent increases in the price of virgin polymers, which seems to be a response to a recent rise in oil prices.
However, oil prices are volatile, and the price of Brent Crude fell back to mid-$70 a barrel after reaching almost $80, showing that we cannot assume that it will keep creeping up.
For industrial grades, demand has been strong, with PP and HDPE markets performing really well.
Indeed, the focus on plastic pollution that began with the TV programme Blue Planet II has seen an unprecedented response from governments, manufacturers and retailers to look at their use of plastics to ensure they are as sustainable as possible.
“There has definitely been an upswing in demand in recent months for recycled plastics from retailers and manufacturers as they increasingly want to be more sustainable.”
It is encouraging that retailers including Tesco and the Co-op are aiming to use much more recycled content in their packaging and reduce the use of difficult to recycle materials such as black plastics. They are also questioning the idea that there are biodegradable options out there promising to be more sustainable, but in reality provide more challenges.
There has definitely been an upswing in demand in recent months for recycled plastics from the retailers and manufacturers as they increasingly want to be more sustainable. For the UK recycling sector, this should present more opportunities – but it may take a while for the full impact to be felt. In the short-term, it is unlikely to compensate for the loss of China as a destination for our waste.
Overall, it is fair to say that there are a number of challenges in the market at the moment. But I am increasingly confident that the future looks bright for UK plastic recycling.
We are seeing more infrastructure investment in countries such as Malaysia as a result of the Chinese import ban, as they see an opportunity for their economy from recycling. Elsewhere, investment is likely to continue, especially if retailers and manufacturers specify more recycled content in their packaging.
But as governments get ever more strict about ensuring their countries are not dumping grounds for poor quality recycled plastics, we have to ensure that we provide a high-quality secondary commodity to them instead.
David Wilson is managing director at Vanden Recycling UK