Recycled plastics have recovered from the impact of the epidemic, but the economy is still facing challenges

With the advent of 2021, a new plastic tax in Europe is driving demand for recycled plastics in the region, while in Asia, it is expected that at least in the first half of this year, recyclers will struggle in a bearish virgin material market and soaring freight rates

After the global recycled plastics market has experienced a turbulent 2020, production margins are under pressure, and the price of plastic raw materials is bearish, causing buyers to avoid choosing recycled plastics

In the Asian market, the combination of uneconomic export opportunities and the expected low virgin prices in the first half of 2021 may mean that the recycled plastics market will continue to struggle, although the upcoming high-spec recycling plants (postponed from 2020) may be Provide new impetus to high-standard recycled plastics in the region

Europe snapped up materials

The European recycled plastics market will be dominated by the EU plastics tax, which was announced in July 2020 and took effect on January 1

Market participants said that in addition to the lack of standard reporting principles in EU member states and the unfavorable economic factors that will continue from 2020, the lack of time to provide planning for the market will lead to a period of uncertainty at the beginning of this year

In the fourth quarter of 2020, buyers are rushing to enter the R-HDPE market because they want to ensure that they can get the supply they need

In terms of pricing, the premium of R-HDPE over blow molding grade HDPE virgin material jumped from 50 euros/ton at the beginning of the fourth quarter to 150 euros/ton in November

R-PET demand is expected to rebound in the first half of 2021

Market participants said that the economic benefits of recycled plastics are not expected to improve significantly

As these economic benefits will continue, buyers on the market may be forced to abandon the cost savings provided by the original market in order to avoid the 800 euro/ton unrecycled plastic tax that has been levied starting in January

Uncertainty may inhibit the development of R-PET in Asia

With the coronavirus full of uncertainties, insufficient container supply and fierce competition for virgin plastics, the Asian recycled plastics market may continue to face pressure in the first half of 2021

According to sources, due to the lack of tourism and large-scale activities in the first half of 2021, the overall PET market is unlikely to experience a rapid recovery

At the same time, limited container supply and rising freight rates limit the export of recycled PET

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Since recycling and waste management services are considered essential, the sources said that they expect any impending supply tensions will be due to increased demand rather than reduced quantities

With low crude oil prices and weak domestic demand, export demand is also expected to remain strong
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Sources said that they expect that into the new year, export demand will remain strong, especially in Mexico, because of the excess capacity of the country's PET film and fiber processing infrastructure
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In 2021, the US domestic market may undergo major changes
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California's September mandatory regulations for recycled content will require plastic beverage containers to contain at least 15% R-PET by 2022
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The demand for R-PET may rise several months before the implementation date
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Overall, market participants expect that as more packaging companies try to fulfill PCR commitments and comply with the law, R-PET prices and demand will continue to grow next year
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