Platts Chemical Trends H1 2026
Platts Chemical Trends H1 2026
Recycled Polymers
Recycled polymers face circularity risk as shutdowns persist
- Virgin discounts pressuring recycled demand
- Weak mandates, penalties hinder procurement
- Shutdowns, margins risk circularity progress
Recycled polymer demand is expected to remain under pressure throughout H1 2026 as virgin materials remain cost-competitive, muted regulatory enforcement persists, and continued recycler shutdowns limit market confidence. Many warn circularity targets could drift further out of reach.
European cost gaps, unclear enforcement pressure circularity
European recyclers continued to struggle to compete with virgin materials in 2025, which remained at a discount to recycled polyethylene terephthalate. Participants expect this pricing imbalance to persist in 2026, keeping buyers focused on cost rather than recycled content unless regulations force a shift.
In Europe, Platts pricing shows R-PET food grade pellets' premium to virgin started 2025 at $566/mt, peaked at $836/mt in early October, and began the final month of the year at $723/mt. Platts is part of S&P Global Energy.
Players cited stable-to-soft demand and a lack of near-term catalysts to lift offtake, especially as no penalties were announced for the EU Single-Use Plastic Directive in 2025.
Recyclers noted that falling prices could help R-PET if spreads narrow, but tight margins leave little room for further discounts while maintaining operational stability.
Recycled polyolefins face even greater pressure as brands reassess packaging strategies amid significant cost differentials with virgin polymers.
“A lot of brands are just thinking, ‘Why bother when virgin is so much cheaper,'” a converter said.
After closures and bankruptcies in 2025, participants do not anticipate a meaningful demand rebound, even with the upcoming Packaging and Packaging Waste Regulation. Under the rule, 35% recycled content will be required in all non-contact-sensitive, non-PET products by 2030, starting from August 2026. Yet, uncertainty around penalties for non-compliance raises concerns that some users may opt to pay fines instead of purchasing recycled products.
“If there’s no brand commitment, they won’t use the recycled material; it’s cheaper to pay the packaging tax and run virgin,” a distributor said.
Brand owners are also facing internal pressure to cut costs, which could lead to an increased use of virgin polymers. Natural recycled high-density polyethylene remains nearly twice the price of virgin, incentivizing substitution.
Recycled polystyrene and recycled acrylonitrile butadiene styrene are expected to hold flat into H1 2026. Electronics and appliances appear steady, with some cautious optimism for construction in Q1. The limited supply of PS packaging waste is likely to continue, encouraging some substitution toward R-PP.
Asia price differentials, lack of mandates limit adoption
Asia’s R-PET outlook remains stable to bearish as prices hold above those of virgin pellets. This premium is prompting recyclers to shift toward sheet or chip production rather than low-end textile applications. Without new regulatory action, most expect flat to soft consumption in 2026. Southeast Asian exporters selling into Europe also anticipate no significant shift in procurement rules.
In Asia, Platts pricing shows R-PET food grade pellets' premium to virgin started 2025 at $385/mt, peaked at $485/mt in mid-August, and began the final month of the year at $352/mt.
The absence of mandates in several Asian markets have kept recycling growth slow, leaving demand reliant on voluntary brand commitments.
The R-PS and R-ABS markets in Asia are expected to remain stagnant as downstream sectors show no apparent signs of recovery. Demand remains packaging-led, offering limited upside for R-PS. With the PS waste supply expected to stay constrained, more substitution toward R-PP is anticipated.
In India, reciprocal tariffs on R-PET imports to the US, as well as the 2025 Plastic Waste Management draft revision, initially weakened demand and pressured prices. Adoption may rise as brands face a tightening two-year compliance window.
The mandate requiring at least 30% recycled content in all rigid plastic packaging from April 1, 2026, is expected to support offtake. Non-food-grade segments, such as R-PE and R-PP, are expected to remain stable; however, greater adoption depends on the Central Pollution Control Board's audits and further regulatory clarification.
Shutdowns, low-cost virgin erode Americas demand
The US R-PE market also remains under pressure after widespread recycler shutdowns and weakened sustainability commitments from brands. With no major legislative mandates or financial incentives, brands face little obligation to purchase R-PE, especially as virgin PE prices decline due to plentiful supply and muted demand.
Soft consumer sentiment and constrained household budgets continue to steer buyers toward cheaper, virgin-based goods, given the discount offered by recycled material.
The US R-PET outlook also trends negatively, driven by reduced processing capacity following California closures in 2025, shrinking spreads against virgin materials, and increased competition from low-priced imports.
In the US, Platts pricing shows R-PET food grade pellets' premium to virgin started 2025 at $341/mt, peaked at $535/mt in early July, and began the final month of the year at $286/mt.
Platts data shows picked-up flake in Los Angeles were priced at $1,013/mt (46 cents/lb) in mid-December, a 42% premium compared to R-PET clear flakes FOB Southeast Asia that were assessed at $710/mt (32 cents/b).
Margin recovery is the main priority for suppliers entering H1 2026, with many expecting slow demand until March or April. Packaging demand remains steady, but profitability depends heavily on regulatory support and brand owners’ follow-through.
Across South America, sentiment remains cautious. Brazil’s R-PET market shows little hope, following a weak 2025 and persistent competition from low-cost virgin resin.
Still, some see a potential boost from an October 2025 government decree, which introduces a reverse logistics system for plastic packaging, including collection and recycled-content targets that begin in 2026. While several provisions need clarification, recyclers say the measure marks an initial step toward stabilizing and eventually rebuilding demand.
Contributors: Sagar Baul, Carla Bridi, Benjamin Brooks, Rosa Castaneda, Heng hou Cheong, Alejandro Chávez, Fumiko Dobashi, Ashish Dhyani, Davi Dos santos, Leo Engels, Yasmeen Feghali, Alex Fiedosiuk, Isaac Foong, Haitian Fang, Charlene Goh, Jing Kang Goh, Talissa Gomes, Zhi Xuan Ho, Joe Higginson, Gustav Inge Holmvik, Hui Heng, Deja Harrison, Zhi yi Tan, Kamna Kapoor, Tareen Kazi, Sunaina Kura, Keith Mackrell, Andre Mikhail, Mainak Moitra, Daniela Morales pumarino, Esther Ng, Finlay Oriordan, Ashley Peh, Iris Poon, Pankaj Rao, Yazu Romero, María Rosales larios, Baran Serdaroglu, Zong Ming Shin, Archit Singh, Dyvia Shah, Maria-Eleni Tsimeki, Fernando Tiscareno, Karina Trevizan, Chichi Ubani, Luke Warren, Mujidah Yahaya, Nate Zhang
Editors: Marieke Alsguth, Jim Levesque, Benjamin Morse, Derek Sands
Design: Content Design