- Licenses to import scrap difficult to obtain
- Gains in recycled film capped by virgin prices
Asian recycled low density polyethylene prices moved higher Jan. 19 due to tight supply.
The lack of availability of scrap due to high freight rates and low recycling rates continued to be a problem. Recycling companies with a poor cash positions found it hard to apply for licenses, as that requires high-end recycling infrastructure. Licenses to import scrap were also difficult to obtain, resulting in thin recycling efforts, market sources said.
Recycled PE film demand was sporadic and replaceable with virgin grades, as the use of recycled films in Asia was not mandated and was only competitive when virgin prices were high, traders said.
Market sources said the gains in the recycled market would be capped as buyers were not willing to pay more than virgin grade PE market prices. Buyers for lower-value applications such as garbage bags, construction materials and other non-food usage remained price sensitive, traders said.
Export rules, such as those that have slashed all mixed waste plastic scrap from Australia since July 2021, will tighten further in July 2022 to allow the export of only processed waste, further lowering scrap imports in Asia, sources said.
Southeast Asia mainly imports recycled scrap from the US, Australia and Japan, but recent freight issues and country-specific waste export bans have made it difficult for Southeast Asian recyclers to obtain fresh scrap, sources said.