- Low waste collection yields
- Recycled prices track virgin-PE trends
The Asian recycled low density polyethylene market declined in the week to May 24 amid weak demand.
Global demand for recycled polyethylene is expected to be slow in the second half of 2023 as market participants grapple with economic competitiveness from virgin PE.
With both the recycled and virgin PE markets suffering from worldwide supply lengths, the link between the two markets was profound throughout 2023.
While in the western continents, such as Europe and North America, both mandated and voluntary commitments drove demand for R-PE, sources said, adding trade flows to Europe had been low, with most of the recycled resin sold in Asia, particularly in China.
Sources also said Europe and US market tolerance to paying a high premium over virgin was waning, given weak market conditions.
Although freight costs had lowered, Asia recycling supply continues to be low due to low waste collection. Sources said they are likely to sell a blended recycled-prime pellet instead of a pure 100% recycled product, in order to fulfil the high grade specifications of European buyers.
In Asia, many buyers prefer virgin as the material requires less processing and was currently cheap and offers a better finished product. It was only the companies who exported blended pellets to Europe or the US that had plans to continue using recycled content.