European recycled to virgin plastics spreads steady despite upstream volatility

In June, the European recycled-to-virgin plastic price spread remained largely steady, with limited impact from upstream volatility amid geopolitical tensions, while recycled styrenics and recycled low-density polyethylene saw price decreases.

PET spreads steady, limited impact from upstream volatility

The recycled polyethylene terephthalate food-grade pellet spread to virgin PET free delivered Northwest Europe widened at the start of June, before remaining steady for the remainder of the month.

The overall steadiness was mainly due to the limited changes in spot prices for both recycled and virgin PET, as demand for PET in Europe remained low, and producers were reluctant to lower their offers.

Platts assessed the virgin PET FD Northwest Europe spot price at Eur980/mt on June 25, up Eur10/mt from the end of May and at a Eur676/mt discount to the R-PET food-grade pellets FD Northwest Europe spot price -- compared with a Eur687/mt spread on May 28.

With the rise in tensions in the Middle East in June, the feedstock paraxylene and purified terephthalic acid spot market saw high volatility, with market participants expecting this to feed through into the virgin PET market.

However, with the ongoing low demand and high stock levels held by preform producers, the increase in the feedstock spot prices did not impact the June virgin PET spot price.

Similarly, in the R-PET market, buying appetite remained low with high stocks and the wide spread to virgin PET making R-PET unattractive for consumers.

R-PE prices ease amid mixed sentiment

In the European recycled low-density polyethylene market, pricing decreased for black and grey pellets as suppliers looked to clear stocks ahead of summer shutdowns. Pricing for these grades decreased to a greater extent than translucent pellets due to a general lack of appetite. In contrast, translucent pellets were sustained by moderate trading activity stemming from steady demand for film applications.

Platts assessed R-LDPE translucent pellets at a Eur70/mt premium to virgin LDPE June 25, unchanged from May 28. The spread widened Eur12/mt in the middle of the month to Eur82/mt on the back of film demand before marginal pricing increases for virgin LDPE brought spreads back to Eur70/mt by the end of June.

Sentiment in the European recycled high-density polyethylene market was mixed amid quiet trading activity, with minimal pricing shifts through June. While demand for pellets was low, interest in mixed-colored HDPE bales was capped by recycler hesitation to buy feedstock, citing pricing volatility in recent months.

Platts assessed R-HDPE natural pellets at a Eur638/mt premium to virgin HDPE June 25, down Eur29/mt from Eur667/mt May 28, with recycled pellets seeing marginal pricing decreases amid subdued trading activity and virgin pellet prices ticking up marginally on stronger demand.

R-PP fundamentals stable, spot price drop

Demand and supply fundamentals in the recycled polypropylene markets were largely stable during June, with spot prices for black pellets dropping at the end of the month as weak demand weighed on pricing.

Despite the decrease in R-PP black pellets, the spread to virgin polypropylene spread ended the month at Eur170/mt, Eur10/mt wider than on June 2. The average spread over June was Eur149/mt.

The spread widened as virgin spot prices flattened towards the end of the month. The Israel-Iran conflict and producers seeking to preserve already tight margins supported flatter virgin prices in the second half of June.

In the natural pellet market, the spread of natural pellets increased. Platts assessed the R-PP natural pellet to virgin spread at Eur670/mt on June 30, Eur50/mt higher than June 2. The average spread was Eur639/mt over the month.

Although this spread was largely stable over the month, it widened in the second half of June as supply tightness for natural pellets led to higher spot prices.

Virgin ABS price drops narrow virgin-recycled spread

Virgin acrylonitrile butadiene styrene prices eased over the month, driven by ample supply, weak demand and falling feedstock costs, which resulted in a narrowing of the spread between virgin and recycled black pellets.

The R-ABS black pellet market remained largely unchanged in June, with the supply remaining healthy and the demand at low levels stable. Poor performance in the automotive sector continued to weigh on the virgin and recycled markets.

Platts calculated the recycled ABS black pellet spread to virgin ABS at an Eur880/mt discount on June 25, and an Eur55/mt increase from Eur935/mt on May 28.

Spot prices in the European recycled polystyrene market maintained their position of firm demand in the black pellet segment, amid a sustained uptick in the construction and agricultural sectors, according to market sources.

The virgin polystyrene market also saw ample supply and weak demand weighing on prices.

Platts calculated the recycled PS black pellet DDP NWE at a Eur550/mt discount to virgin high-impact polystyrene (HIPS) on June 25, down Eur75/mt from a Eur625/mt at the end of May.

Platts is part of S&P Global Commodity Insights.