Mixed plastic waste and pyrolysis oil

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Gain a transparent view of the opaque mixed plastic waste and pyrolysis oil markets in Europe. With the growth of chemical recycling in Europe, competition for mixed plastic waste feedstock is intensifying. Pyrolysis-based plants targeting mixed plastic waste (with a focus on polyolefins) as feedstock account for ~60% (2023) of all operating chemical recycling capacity in Europe.

Remain at the forefront of this rapidly evolving market, with comprehensive pricing and market coverage of key recycling and burn-for-energy feedstocks and pyrolysis oil prices. Waste bale prices include mixed polyolefins, refuse derived fuel (RDF) bales and unsorted materials recovery facility (MRF) waste.

Pyrolysis oil pricing includes naphtha substitute, non-upgraded and tyre derived grades.
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ICIS has been covering recycled polymer and plastic waste markets since 2006 and holds multiple price benchmarks across the major recycled polymers of R-PET, R-PE and R-PP, as well as across virgin chemical markets. Our experience gives us the insight to contextualise and evaluate the latest market developments and industry trends in a trustworthy, timely and impartial manner.

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Mixed plastic waste and pyrolysis oil news

China price pressures to remain weak on persistent weak demand

SINGAPORE (ICIS)–China's consumer inflation rate is expected to remain weak in the near future on persistently weak domestic demand, raising worries about the risk of deflation as the nation's economic recovery struggles to gain traction. This comes as the country's consumer price index (CPI) rose by a mere 0.3% year-on-year in May, unchanged from April and well below the government's 3% target. "Amid still-weak domestic demand, we expect CPI inflation to stay slightly above zero in the near term and producer price index (PPI) inflation to be slightly less negative on a low base," Japan's Nomura Global Markets Research said in a note. China's headline inflation rate is projected to remain positive but stay mild under 1% until the third quarter of this year, said Ho Woei Chen, an economist with Singapore-based UOB Global Economics & Markets Research. "The deflation in the fourth quarter of 2023 will provide a low base for CPI to rebound more strongly in the last quarter of the year," Ho said. UOB's full-year forecast for China's headline inflation is at 0.7% for 2024, compared with 0.2% in 2023, "but current trajectory suggests that the risk is to the downside", she added. Meanwhile, factory gate prices continued their downward spiral, with the PPI falling for the 20th consecutive month in May. The PPI declined by 1.4% year on year in May, a slight improvement from the 2.5% drop in April. "The pace of PPI deflation is expected to ease but this had been slower than expected as oil prices stayed muted and overcapacity in some industries weighed on the prices of manufactured goods," Ho said. "Increasing tariffs imposed on Chinese goods may further delay the price recovery." The persistent low inflation is a stark contrast to the high inflation plaguing Western economies, further fueling fears of deflation as China grapples with sluggish consumer spending – a key obstacle to the country's uneven recovery from the pandemic. While inflation is likely to remain low in the second quarter, it should begin to pick up in the second half of the year, Dutch banking and financial information services provider ING said in a note. "Although inflation is set to pick up this year as the drag from falling food prices fades, it is anticipated to remain well below target amid slowing consumption and weak demand pressures," the World Bank said in its June Global Economic Prospects report released on 11 June. "Producer price pressures are also set to remain weak in the context of subdued activity and softening prices for commodities, particularly energy and metals." China's economic growth is projected to ease to 4.8% in 2024, down from 5.2 percent in 2023, as activity is expected to soften in the latter half of this year, according to World Bank estimates. While a potential uptick in goods exports and industrial activity, bolstered by a global trade recovery, is anticipated, this will likely be counterbalanced by weaker domestic consumption, it added. "We expect domestic and external demand to continue diverging over the near term, as the property fallout sustains and the economy rebalances itself," Nomura said. "Export growth is likely to remain resilient in the near term, thanks to a low base, the resilient US economy, the global tech upswing, the price advantage of Chinese products and some front-loading ahead of scheduled or threatened tariff hikes." Focus article by Nurluqman Suratman


Styrolution to permanently shut Sarnia styrene plant in Canada

HOUSTON (ICIS)–INEOS Styrolution will close its 445,000 tonnes/year styrene production plant in Sarnia, Ontario, Canada, by June 2026, the company announced Tuesday. Styrolution has been involved in a dispute with Canadian government officials over the plant after a nearby indigenous group complained about benzene emission levels from the site. The company shut the plant for maintenance in April after the complaints surfaced. But Styrolution said that was not the reason for the plant closure. “Our decision to permanently close the Sarnia site by June 2026 is irrespective of the current situation,” the company said in a news release. Styrene producers in North America, as well as globally, have been battling poor economics due to over-capacity. North American styrene operating rates have been under 70% so far this year. China, once a key outlet for North American styrene, has added significant styrene capacity over the past three years. China commissioned 3.7 million tonnes of styrene capacity in 2023 alone. “This difficult business decision to permanently close our Sarnia site was made following a lengthy evaluation process and is based on the economics of the facility within a wider industry context,” Styrolution CEO Steve Harrington said. “The long-term prospects for the Sarnia site have worsened to the point that it is no longer an economically viable operating asset.” Even with the loss of styrene supply to the market, the Sarnia plant closure in April has had no impact on styrene spot prices. “Additional large investments that are unrelated to the potential costs of restarting operations would be necessary in the near future. Such investments would be economically impractical given today’s challenging industry environment,” Harrington said. In late May, Canada’s federal environment minister extended an order imposing stricter benzene emission controls on plants operating at the Sarnia petrochemicals production hub in southern Ontario, close to the US border and Detroit, Michigan, for two years. The order came after an Ontario provincial ministry suspended production operations at Styrolution's Sarnia styrene plant following the complaints from residents about potentially high benzene emissions. In addition to styrene, the Sarnia plant has ethylbenzene production capacity of 490,000 tonnes/year, according to the ICIS Supply and Demand Database. Styrolution operates two additional styrene plants in North America – the 770,000 tonnes/year facility in Bayport, Texas, and the 455,000 tonnes/year plant in Texas City, Texas. The Sarnia plant represents approximately 7% of North American nameplate styrene capacity. Styrene is a chemical used to make latex and polystyrene resins, which in turn are used to make plastic packaging, disposable cups and insulation. Major North American styrene producers include AmSty, INEOS Styrolution, LyondellBasell Chemical, Shell Chemicals Canada, Total Petrochemicals and Westlake Styrene. Thumbnail shows a cup made of polystyrene (PS), which is one of the main derivatives of styrene. Image by ICIS.


VIDEO: Global oil outlook. Five factors to watch in week 24

LONDON (ICIS)–Crude prices could move sideways this week as investors await key economic data. The US Consumer Price Index (CPI) and Producer Price Index (PPI) will be released this week, as will Chinese inflation figures for May. ICIS experts look at the factors likely to drive oil prices in Week 24.


India’s GAIL to build $7.2bn Madhya Pradesh petrochemical complex

MUMBAI (ICIS)–State-owned GAIL (India) Ltd plans to invest Indian rupee (Rs) 600 billion ($7.2 billion) to build an ethane cracker and its derivative plants in Madhya Pradesh. The cracker will have a 1.5 million tonne/year capacity and will be set up at Ashta in the Sehore district of the state in central India, GAIL said in a regulatory disclosure to the Bombay Stock Exchange (BSE) on 10 June. GAIL did not provide product or capacity details of the ethylene derivatives it plans to produce at the complex. “Around 800 hectares of land shall be provided by the MP [Madhya Pradesh] Industrial Development Corporation, for which the state government has already initiated the process,” GAIL said. Project construction is expected to begin by February 2025, with commercial production likely in the financial year ending March 2031, it added. Investment on the project is still pending approval from GAIL management board, and the mode of financing yet to be decided. The Madhya Pradesh state government has approved the project and land will be allotted soon, state chief minister Mohan Yadav had said in a statement on 7 June. He said that “petrochemicals like linear low density polyethylene (LLDPE), high density polyethylene (HDPE), mono ethylene glycol (MEG) and propylene will be produced” at the site. The new project is part of GAIL’s initiative to enhance its petrochemical portfolio, a company source said. “The demand for petrochemicals is increasing in the country, led by expanding industrial, construction and manufacturing,” he said, citing an 8-9% annual growth rate in India’s polymer demand. In March 2024, GAIL had signed a tripartite agreement with Oil and Natural Gas Corp (ONGC) and Shell Energy India to explore opportunities for the import of ethane and other hydrocarbons at Shell Energy Terminal in Hazira in the western Gujarat state. Separately, the company recently announced plans to set up liquid pipeline for ethylene (C2), propylene (C3) from Vijaipur to Aurai in the northern Uttar Pradesh state. At Pata in the same state, GAIL will begin operations at the 60,000 tonne/year PP plant by December 2024. At Usar in the western Maharashtra state, GAIL expects to begin operations at its 500,000 tonne/year propane dehydrogenation unit (PDH) and 500,000 tonnes/year polypropylene (PP) line by April 2025; and its 50,000 tonne/year isopropylene project by December 2025. In the southern Karnataka state, the company expects to bring on line its 1.25m tonne/year purified terephthalic acid (PTA) plant in Mangalore by March 2025. GAIL had acquired JBF Petrochemicals in June 2023 which allowed it to add PTA to its existing petrochemical portfolio. ($1 = Rs83.49) Focus article by Priya Jestin


Chile’s Petroquim navigating better than peers pressure from Asian material – exec

SANTIAGO (ICIS)–Polypropylene (PP) producer Petroquim is also facing pressure from lower-priced material sent from Asia, but the company’s “dedicated” service to customers has kept its sales spared from a larger hit, according to the commercial manager at the Chilean company. Veronica Masjuan said that, as the sole PP producer in Chile, Petroquim will always be able to have a pool of potential customers larger than its actual production, a key element allowing the company to protect its “small market share” in a country where PP imports have always played a key role to supply the market. Founded in 1998, Petroquim operates a PP plant in Talcahuano, near the city of Concepcion, 500 kilometers south of Santiago. It has the capacity to produce 120,000 tonnes/year, according to the ICIS Supply & Demand database, although in 2023 it produced 61,000 tonnes. ASIAN PRESSUREAcross Latin America, producers of polymers have in the past two years been under intense pressure from lower-priced Asian material, especially Chinese material, which has been sent, on occasion, at below cost-of-production prices. Masjuan said it was not for her to say if China’s exports constituted an example of dumping – “that would be for policymakers to do” – but said that lower prices in the past two years had indeed put pressure on Petroquim’s margins. “The truth is that their [China’s] prices are very economical compared to the global PP prices, when you add the costs associated with production or delivery, for instance,” said Masjuan. “Given that our market share is small, we have managed to protect it quite well: my sales capacity is much larger than what I produce, so to speak. But it is true that lower international prices have also affected our margins.” However, Masjuan said Petroquim has always managed to return a profit, even in 2023, which is considered the hardest year amid the downcycle the global petrochemicals sector is going through. RECYCLINGMasjuan said that Chile is more ahead than other countries in Latin America in tackling the plastic waste issue, as regulations in that regard started decades ago. Asked whether a true circular economy in which everything is 100% recycled could put polymers producers such as Petroquim out of business, she said that is unlikely because total circularity would be very difficult to achieve. “Chile was one of the first countries to adopt mandates about plastic carrier bags, for instance. We have some experience on this front, and at Petroquim we have a person exclusively dedicated to circularity issues,” said Masjuan. “Who is to blame for the plastic waste pollution? I think that first and foremost the responsibility falls with the consumer, the user of the final plastic product. Meanwhile, I do agree that producers, for sure, need to be in constant search for new methods to make the products more recyclable. “But, overall, I believe not 100% of all polymers will be recycled, ever, and especially those for food contact. For instance, in the EU, one of the most advanced regions in that regard, they don’t allow 100% recycled content for food contact either.” Front page picture: Petroquim’s PP plant in Talcahuano Source: Petroquim  Additional reporting by Bruno Menini and Thais Matsuda


Yearly average Europe R-HDPE spreads suggest squeezed margins for pipe-grade producers

LONDON (ICIS)–Yearly average Europe recycled high density polyethylene (R-HDPE) pipe-grade black pellet prices in 2024 to date are at their lowest level since 2020. 2024 prices to date are the second-lowest yearly average price on record, behind 2020. These prices are a result of the cost-of-living crisis muting construction demand and driving oversupply across the market over the past 18 months. The yearly average price in 2023 was just €50/tonne above its current level. Yearly average pipe-grade black pellet price Year Average price (€/tonne) 2019 (price series began in May) 843 2020 696 2021 1,009 2022 1,267 2023 850 2024 (to date) 800 Producers of pipe-grade black pellets have been complaining of squeezed margins since early 2023, something which is borne out by examining average prices. The yearly average spread between mixed-coloured bale feedstock values (see bale section) and pipe-grade pellets is also at its lowest since 2020, and its second lowest on record. Yearly average spread mixed-coloured bale vs pipe-grade black pellet Year Average spread (€/tonne) 2019 (price series began in May) 537 2020 524 2021 597 2022 717 2023 543 2024 (to date) 533 Nevertheless, this doesn’t show the full picture since energy and labour costs remain considerably higher than they were in 2020 due to inflationary pressures. Coupled with this, the above chart does not factor in wastage rates, which are at least 25% and often higher. What this means is that at a 25% wastage rate, you’d need to input 1.25 tonnes of feedstock waste – increasing the cost base. Adjusting the spreads to account for a 25% wastage rate shows that the average spread in both 2023 and 2024 to date were identical, and that both are the lowest seen since 2019.  Yearly average spread mixed-coloured bale vs pipe-grade black pellet (adjusted at 25% wastage rate) Year Average adjusted spread (€/tonne) 2019 (price series began in May) 460 2020 481 2021 494 2022 579.5 2023 466.25 2024 (to date) 466.25 Market players are becoming increasingly concerned over the demand outlook beyond Q2, due to a combination of mounting substitution pressure from virgin (particularly for non-packaging grades) and the approach of the summer lull. Substitution pressure from virgin and off-spec material is likely to disproportionately impact on non-packaging grades, which typically purchase recycled material for cost-saving reasons. Seasonal factors typically mean that pipe-grade pellet prices are typically stronger in the first half of the year than the second, with June representing the last month when prices are typically above the yearly average. This is both due to construction activity typically being more limited in winter months when temperatures are colder, and the impact of typical convertor summer shutdowns for routine maintenance in July/August, followed by destocking in Q4 to lower working capital on year-end balance sheets. During July and August, downstream convertors typically shut for several weeks of routine maintenance. Typically southern Europe shuts earlier than northern Europe, with the majority of northern Europe shutdowns occurring in August. There has been repeated talk in the past few weeks of German convertors shutting as early as late-June this year due to negative macroeconomic conditions in the country. This price trend can be seen in the Seasonality Index chart below. The seasonality index shows which months in the year prices are typically higher than average, and which months they are typically lower than average, and to what extent. It reveals underlying trading patterns in markets beyond short-term supply/demand conditions. The average price is represented by 1.00. When the index is below 1.00 it means that prices are typically below average in that month, and when above 1.00 it means prices are typically above average in that month, with the distance from 1.00 showing the extent. It is calculated by first dividing each monthly price by the average price for that year to give an index value. Then, all of those monthly index values are averaged to give a single value for each month. Those averaged monthly values are used to plot the seasonality index. The longer a price series has been running, the more accurate the seasonality index. ICIS began pricing R-HDPE bales in May 2019. Focus article by Mark Victory


Yearly average R-PP post-industrial bale prices at record low in 2024 to date

LONDON (ICIS)–Average yearly recycled polypropylene (R-PP) post-industrial black bale values in 2024 to date are at their lowest level on record on the back of the impact of the cost-of-living crisis on key end-use sectors such as construction and horticulture. May monthly average post-industrial black bale prices in 2024 reached the lowest level seen in May since 2020. Sentiment beyond Q2 remains weak, with players increasingly concerned in the past few weeks over substitution risk to virgin, macroeconomic weakness (particularly in the construction sector), the end of the peak horticulture season, and the approach of the summer holiday period. The yearly average price for post-industrial black bales is at its lowest on record to date in 2024. Year Average price (€/tonne) 2020 286 2021 518 2022 555 2023 302 2024 (to date) 280 ICIS began pricing R-PP post-industrial bales in November 2019. Prices in the first half of the year for post-industrial grades are typically higher than in the second half of the year. Historically, post-industrial bale values are typically highest in the first half of the year (due to the peak horticulture, outdoor furniture and construction seasons) through to July, before typically hitting their lowest point for the year in Q3, before rebounding in Q4 (although remaining below the average for the year). This is clearly shown in the below seasonality chart. The seasonality index shows which months in the year prices are typically higher than average, and which months they are typically lower than average, and to what extent. It reveals the underlying trading patterns in markets beyond short-term supply-and-demand conditions. The average price is represented by 1.00. When the index is below 1.00 it means that prices are typically below average in that month, and when above 1.00 it means prices are typically above average in that month, with the distance from 1.00 showing the extent. It is calculated by first dividing each monthly price by the average price for that year to give an index value. Then, all of those monthly index values are averaged to give a single value for each month. Those averaged monthly values are used to plot the seasonality index. The longer a price series has been running, the more accurate the seasonality index. The lull in Q3 is typically due to the impact of downstream convertor closures. During July and August, downstream convertors typically shut for several weeks of routine maintenance. Typically southern Europe shuts earlier than northern Europe, with the majority of northern Europe shutdowns occurring in August. There has been repeated talk in the past few weeks of German convertors shutting as early as late June this year due to negative macroeconomic conditions in the country. Convertor summer shutdowns have a significant impact on bale values, because waste volumes continue to enter the chain, lengthening the market. If shutdowns occur earlier than typical in 2024, this could exacerbate the oversupply. There remains a wide spread between natural bales and black and mixed-coloured post-industrial bales. Post-industrial bale natural prices have been as high as €700/tonne ex-works NWE in recent weeks. As with post-industrial bales, black pellet prices are typically at their highest in the first half of the year, and at their lowest in the second half of the year (compared to the average price for the year). This is due to the seasonality of the horticulture and construction sectors, where peak seasons typically take place in the first half of the year when temperatures are higher. This is shown in the below seasonality graph. Natural post-industrial pellets share a similar seasonal trend, although the peak tends to happen at the start of the year (due to restocking following the year-end) with natural post-industrial material not as exposed to the horticulture sector as black and mixed-coloured material. Focus article by Mark Victory


PODCAST: Europe, Middle East, south Asia, Africa PE & PP outlook for June – calm masks complex, competing trends

LONDON (ICIS)–Jumping freight rates, political elections and monsoons are all at play for June in various polyethylene (PE) and polypropylene (PP) markets around the world, so while it is potentially a calm month on the surface, there is a complex mix of factors to watch. Senior editors for PE and PP, Nadim Salamoun and Ben Lake join senior editor manager Vicky Ellis to discuss the June outlook for Europe, Middle East, south Asia and Africa. They also touch on May as a busy month for PE and PP, pointing listeners to ICIS coverage at APIC in Seoul and Italy’s plastic tax extension. Podcast edited by Nick Cleeve


PODCAST: MOL head of petchems – how polyols project drives shift from fuels to chemicals

BARCELONA (ICIS)–MOL’s €1.3bn polyols project helps move the company’s balance from transport fuels towards chemical production, according to Peter Csaszar, the company's senior vice president, chemicals. Long-term, Hungary’s MOL will move towards chemicals as demand for transport fuels declines Russia-Ukraine war raised importance of energy security Commercial scale start-up of polyols project by end summer-early autumn On-spec commercial production expected by end 2024 Production targeted at Europe Europe chemicals still suffering, improvement expected by 2025 MOL has 35-year contract to manage Hungary’s municipal waste Waste provides feedstocks for recycling, energy recovery New EU parliament must make industrial policy a top priority In this Think Tank podcast, Will Beacham interviews ICIS Insight Editor  Peter Csaszar, senior vice president, chemicals for MOL and Paul Hodges, chairman of New Normal Consulting. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here . Read the latest issue of ICIS Chemical Business. Read Paul Hodges and John Richardson's ICIS blogs.


US May auto sales tick higher from April, but macroeconomic stressors weigh on demand

HOUSTON (ICIS)–US May auto sales ticked higher from the previous month and are up year on year on a seasonally adjusted annual rate (SAAR), but demand continues to face headwinds from widespread staff reductions and companies scaling back procurement. Jincy Varghese, ICIS demand analyst, said the macroeconomic stressors continue to weigh on demand. Varghese said the impact of uncertainty surrounding the 2024 US presidential election on consumer sentiment is another challenge facing the industry. But sales continue to trend higher, which is important to the chemicals industry as the auto sector is a large end-use for chems. Light vehicle sales were at a 15.9-million-unit pace in May, with gains primarily from domestic sales as sales of foreign vehicles softened, according to Kevin Swift, senior economist for global chemicals at ICIS. Swift said the month-on-month increase was the second in a row after a mixed pattern over the past few quarters. The increase was not necessarily a surprise to market participants as May is typically a high-volume sales month, according to Patrick Manzi, chief economist for the National Automobile Dealers Association (NADA). Vehicle sales and leasing data analysts Motor Intelligence estimated that seasonally adjusted, annualized rate of sales was 16.08 million, the first time it has topped 16 million since July 2023. MICROCHIP SALES SURGE IN Q1 Global sales of semiconductors surged in Q1, according to the Semiconductor Industry Association (SIA), including a 26% increase in the America. Monthly sales are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. A shortage of microchips in 2022 hit the US auto industry hard, with production falling to just less than a 13-million-unit pace. Semiconductors are used in modern vehicles to control everything from the engine, antilock brakes, power steering, fuel monitoring system and heating and air conditioning. The US government enacted the CHIPS and Science Act in 2022, which has led to a boost in domestic production. The SIA said in a recent report produced with the Boston Consulting Group (BCG) that projects the US will triple its domestic semiconductor manufacturing capacity by 2032. The report also predicts that the US will grow its share of advanced logic manufacturing to 28% of global capacity by 2032. CHEMS USED IN AUTOS Demand for chemicals in auto production come from, for example, antifreeze and other fluids, catalysts, plastic dashboards and other components, rubber tires and hoses, upholstery fibers, coatings and adhesives, Swift said. Virtually every component of a light vehicle, from the front bumper to the rear taillights, features some chemistry. The latest data indicate that polymer use is about 423b (192kg) per vehicle. Meanwhile, electric vehicles (EVs) and associated battery markets are an important growth opportunity for the chemical industry, with chemical producers separately developing battery materials, as well as specialty polymers and adhesives for EVs. Focus article by Adam Yanelli Please also visit the ICIS topic page Automotive: Impact on Chemicals


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