The global recycled plastics market will continue to grapple with unfavorable economics in 2020. In the long term, demand for recycled plastics is expected to grow significantly, along with recycling rates for core materials PET, PE and PP. But in the short term, there is likely to be a mismatch globally between the high demand for recycled plastic and the available supply, which should see a further disconnect in pricing mechanisms between virgin and recycled plastics as recyclers try to maintain margins. Price competition The bearish sentiment in the virgin plastics market due to significant production capacities planned to come online both in China and the US will test brand owners’ commitments to purchasing recycled plastics in 2020. In China, around 1.7 million mt/yr of PET capacity will be added. In the US, 34.35 million mt/yr of polyethylene capacity will be added in the 2020s and, in the near future, the market is awaiting LyondellBasell’s 550,000 mt/yr HDPE plant to start up in 2020 in the Houston Ship Channel. In the face of cheaper virgin material, brand owners will either bite the bullet and continue buying the more expensive recycled material, or reduce recycled plastic purchasing to minimum levels. This… continue reading
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Source: CTRM Center