Expandable polystyrene (EPS) and polystyrene (PS)

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A versatile plastic used to make a wide variety of consumer products, expandable polystyrene (EPS) and polystyrene (PS) are integral in industries such as food packaging, appliances, construction, and some niche automotive applications for polystyrene, and for expandable polystyrene construction, white goods packaging, and fish boxes packaging. These industries and more are impacted every day by the dynamics of global and regional PS and EPS markets, as well as developments in the upstream styrene market.

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Latin America stories: weekly summary

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 19 April. NEWS Brazil’s Petrobras, China’s CNCEC mull petchems, fertilizers joint projects Petrobras and China’s chemicals major CNCEC have signed a memorandum of understanding (MoU) to explore petrochemicals and fertilizers joint projects, the Brazilian state-owned energy major said on Thursday. INSIGHT: Argentina’s petchems hit hardest by recession as country holds breath under Milei Argentina’s petrochemicals are taking a severe hit amid the recession, with falls in demand for some materials of up to 50%, but companies and the country are holding firm under the new President’s economic shock therapy. Brazil's Petrobras re-enters fertilizers sector with restart at ANSA plant Petrobras is to restart its large-scale ANSA fertilizers plant in Araucaria, state of Parana, which has been idle since 2020, the Brazilian state-owned energy major said late on Wednesday. Pemex to remain ‘fiscal challenge’ for Mexico's new administration – S&P Beleaguered finances at Pemex, the Mexican state-owned energy major, will require support from the federal budget for years to come, the analysts at S&P said this week. Argentina’s lower rates helping central bank shore up balance sheet at savers’ expense – economist Argentina’s latest cut to interest rates had more to do with shoring up the central bank’s balance sheet, possible thanks to currency controls implemented by the prior Administration, than the actual control of price rises, according to the director at Buenos Aires-based Fundacion Capital. Latin America's fiscal consolidation at risk of slippages as plans postponed – IMF Latin America’s countries high debt levels require fiscal consolidation plans which in some cases are being postponed, increasing risks for the long-term financial stability of the region, the Director of the Western Hemisphere Department at the IMF said on Friday. Chile inflation falls to 3.7% in March Chile’s annual inflation rate fell in March to 3.7%, down from 4.5% in February, according to the country’s statistics office INE. Brazil’s automotive output barely up in Q1, sales rise 9% Brazil’s petrochemicals-intensive automotive output rose by 0.4% in the first quarter, year on year, to just below 550,000 units, the country’s trade group Anfavea said on Monday. LatAm PE domestic price lower in Chile on cheaper US export offers Domestic polyethylene (PE) prices were assessed lower in Chile because of cheaper US export offers. In other Latin American (LatAm) countries, prices remained steady. Latin America’s February lube demand holds steady Lube demand in Latin America was relatively steady in February at a time of year when consumption typically falls in other markets like the US and Europe. The steady consumption coincided with lower base oils output in the region in February. LatAm PP international prices stable to up on higher freights from Asia International polypropylene (PP) prices were assessed as stable to higher because of increased freight rates from Asia to the region. However, Asian offers remain competitive compared to other origins like the Middle East and the US. Plant status: Dow Argentina shuts HDPE and LDPE plants on technical issues – sources US chemicals major Dow’s subsidiary in Argentina shut on 16 April a high density polyethylene (HDPE) plant due to a mechanical pump failure and a low density polyethylene (LDPE) plant due to technical failure, several sources said. Weather conditions starts to slightly shift PET demand in Latin America Polyethylene terephthalate (PET) prices remained stable in Brazil, with a slight softening in consumption coinciding with stabilized temperatures. However, demand continues to exceed expectations when compared with the corresponding period last year. Weather conditions starts to slightly shift PET demand in Latin America Polyethylene terephthalate (PET) prices remained stable in Brazil, with a slight softening in consumption coinciding with stabilized temperatures. However, demand continues to exceed expectations when compared with the corresponding period last year.


Styrolution shutting Sarnia styrene plant after resident complaints

HOUSTON (ICIS)–INEOS Styrolution is temporarily shutting its styrene plant in Sarnia, Ontario, after nearby residents complained they became ill from the plant’s emissions. “At INEOS Styrolution, ensuring the health and safety of our employees and community is paramount,” the company said in a statement. “We are temporarily shutting down our facility located in Sarnia, Ontario, Canada, to perform maintenance and address a mechanical issue. We will resume operations once addressed.” The plant has capacity to produce 445,000 tonnes/year of styrene and 490,000 tonnes/year of ethylbenzene (EB), according to the ICIS Supply and Demand Database. The shutdown came after the Aamjiwnaang First Nation community asked the government to close the plant when members complained of becoming sick and said that data indicated high levels of benzene in the air. Members reported having headaches, nausea and dizziness due to poor air quality. Aamjiwnaang First Nation describes itself as a community of about 2,500 Chippewa Aboriginal peoples located on the St Clair River in the city limits of Sarnia. Last week, Ontario Environment Minister Andrea Khanjin said that she expected the company to “quickly identify and reduce” emissions at the site, according to news reports. In 2020, the Ministry of Environment, Conservation and Parks created the Sarnia Area Environmental Health Project to look into concerns that residents expressed about air pollutants and other quality-of-life impacts from living close to industrial operations in the area. The project includes regularly measuring air quality for potential health risks. The shutdown will further tighten the North American styrene market, which has experienced a number of outages that have put upward pressure on contract and spot prices. Styrolution’s Texas City, Texas, plant has been shut since mid-2023. In addition, Total remains on force majeure from its joint-venture CosMar unit in Carville, Louisiana, and LyondellBasell’s propylene oxide/styrene monomer (POSM) plant in Channelview, Texas, is undergoing maintenance. Shell recently restarted its Scotford, Alberta, styrene unit but it is not operating at full capacity, according to market sources. US styrene contract prices in April were assessed at their highest level since Q3 2023 due to the rise in spot prices, which are up approximately 50% since the beginning of the year. 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.


Singapore March petrochemical exports fall 3.6%; NODX slumps 20.7%

SINGAPORE (ICIS)–Singapore's petrochemical shipments in March fell by 3.6% year on year to Singapore dollar (S$) 1.16 billion ($853 million), extending the 2% contraction in the previous month and weighing on overall non-oil domestic exports (NODX), official data showed on Wednesday. March non-electronic NODX down 23.2% year on year March manufacturing PMIs show continued expansion Singapore economy forecast to grow 1.0-3.0% in 2024 Overall exports of chemicals and chemical products in March fell by 37% year on year to S$3.54 billion, reversing the 5.8% expansion in February, Enterprise Singapore said in a statement. The country's NODX for the month fell by 20.7% – a much steeper decline from February’s 0.2% contraction – to S$14 billion because of a high base a year ago, with shipments to most major trading partners posting declines. March non-electronic NODX, which includes petrochemicals and pharmaceuticals, fell by 23.2% year on year to S$11.2 billion. Overall NODX to seven out of Singapore's top 10 markets fell in March, but shipments to Hong Kong, Taiwan and China rose. Singapore is a major manufacturer and exporter of petrochemicals in southeast Asia. Its petrochemicals hub Jurong Island houses more than 100 global chemical firms, including energy majors ExxonMobil and Shell. In the first quarter, the country’s economy grew by 2.7% year on year in the first quarter, accelerating slightly from the 2.2% expansion in the preceding quarter, according to official advance estimates. On a quarter-on-quarter seasonally adjusted basis, Singapore’s economy expanded by 0.1%, extending the 1.2% expansion in Q4. The manufacturing sector in Q1 grew by 0.8% year on year, moderating from the 1.4% expansion in the previous quarter. "Within the sector, output expansions in the chemicals, precision engineering and transport engineering clusters more than offset output contractions in the electronics, biomedical manufacturing and general manufacturing clusters," the Ministry of Trade and Industry (MTI) said. For the whole of 2024, Singapore's economy is expected to expand by 1.0-3.0%, compared with actual GDP growth of 1.1% growth in 2023, the ministry said. Manufacturing activity in Singapore improved in March, with the Singapore Institute of Purchasing and Materials Management (SIPMM) purchasing managers' index (PMI) inching up to 50.7, marking the seventh straight month of expansion. In contrast, a separate survey of private manufacturers by financial information and services provider S&P Global showed Singapore’s March PMI eased to 55.7 from 56.8 in February. Focus article by Nurluqman Suratman Thumbnail image: Singapore harbour and the Marina Bay Sands Hotel, 16 March 2023. (Franz Neumeier/imageBROKER/Shutterstock) ($1 = S$1.36)


Latin America stories: weekly summary

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 5 April. NEWS Mexico’s automotive output falls nearly 13% in March Mexico’s automotive sector output fell by 12.75% in March, month on month, to just over 300,000 units, the country’s statistical office Inegi said on Wednesday. Sanitation framework, nascent LatAm lithium industry keeping Brazil’s chloralkali afloat – Abiclor Brazil’s chlorine and caustic soda sectors have kept afloat in better health than the wider chemicals industry as sanitation plans and new lithium exploitations across Latin America keep demand high, according to the director general at the country’s trade group Abiclor. Brazil’s chemicals, industrial output falls in February Brazil’s chemicals output fell in February by 3.5%, month on month, one of the largest falls among the subsectors measured, the country’s statistical office IBGE said on Wednesday. Petrobras ‘proactively’ engaging with Federal auditor about tolling contract with Unigel Petrobras continues to “clarify in a timely manner” all the information requested by the Federal auditor regarding its tolling contract with Unigel, a spokesperson for the Brazilian energy major said to ICIS on Tuesday. Brazil’s Unigel postpones Q4 results amid debt restructuring Unigel has postponed the publication of its Q4 and 2023 financial results as its debt restructuring is ongoing, the Brazilian chemicals and fertilizers producer said on Tuesday. MOVES: Brazil’s Unipar appoints Alexandre Jerussalmy as CFO Unipar has appointed Alexandre Jerussalmy as CFO and investor relations officer, effective immediately, the Brazilian chemicals producer said on Tuesday. Colombia’s manufacturing slows down in March on lower sales Colombia’s manufacturing output growth slowed down in March on the back of lower sales, although it marked its third month in expansion territory, analysts at S&P Global said on Monday. Brazil's manufacturing March output healthy on new orders, fueling job creation Brazil’s manufacturing continued expanding at pace in March on the back of a healthy new order book, prompting firms to increase workforces, S&P Global said on Monday. Mexico’s manufacturing steady in March but subdued US demand causes concern Mexico’s manufacturing output stayed stable in March but firms are getting increasingly worried about lower demand from the US, the key market for the country’s export-intensive manufacturers, analysts at S&P Global said on Monday. PRICING Lat Am PP domestic prices down in Argentina, Mexico on lower US PGP spot prices, weak demand Domestic polypropylene (PP) prices dropped in Argentina and Mexico on the back of lower US spot propylene prices and weak demand. In other Latin American countries, prices remained steady. LatAm PE international prices steady to lower on lower US export offers International polyethylene (PE) prices were assessed as steady to lower on the back of lower US export offers. Ethanol prices in Brazil experiencing surges during April The prices of hydrous ethanol surged during the initial week of April, propelled by consistent strong sales in Brazil. Unigel to raise PS April prices in Brazil Unigel is seeking an 11% price increase on all grades of polystyrene (PS) sold in Brazil starting on 1 April, according to a customer letter. Innova seeks April PS price increase in Brazil Innova is seeking a real (R) 1,000/tonne ($200/tonne) price increase, excluding local taxes, on all grades of polystyrene (PS) sold in Brazil starting on 1 April, according to a customer letter.


INSIGHT: Global manufacturing continues to expand in March

LONDON (ICIS)–Encouraging global manufacturing news this week included signals that new orders and output are continuing to expand as industries pull out of the lengthy trough. World manufacturing output increased in March for the third successive month, a sub index of the JP Morgan Global Manufacturing PMI indicated. The rate of growth accelerated to a 21-month high. The new export business trend improved and, while the index showed continued contraction, it did move closer to stabilisation with contraction at a similar pace to that shown in June 2022. The global manufacturing purchasing manager’s index (PMI) stood at 50.6 in March from 50.3 in February climbing to its highest reading since July 2022. Overall operating conditions have improved in each of the past two months, JP Morgan and the index compiler, S&P Global said. Chemical producers are in desperate need of demand growth as they seek to raise operating rates and respond effectively to the inevitable pull away from the downturn. Anticipating the pace of recovery is all important if profitability is to be underpinned effectively. Manufacturing growth has accelerated in the US and China although India led the rankings in March. The euro area is improving but remains a drag on the global rating. JP Morgan still talks of the steep downturn in Germany and Austria, a further contraction of manufacturing in France and a fresh decline in Ireland. Europe’s struggles to match output to demand were particularly tough last year. Data from Germany’s VCI show that Europe remained hardest hit by the global industrial crisis. Production was lowered in almost all industrial sectors. Consumer facing industries were hit by weak consumer consumption and higher interest rates impacted the capital goods and construction industries. In response to weaker demand regionally and globally and, particularly in the face of the energy crisis brought on by Russia’s invasion of Ukraine, European chemical producers have been forced to cut back. The VCI data show that chemicals production in the EU was moving sideways from 2020 and that production was reduced in 2022 because of much higher raw material and energy costs. 2023 brought little relief because of the demand downturn and certainly no turnaround towards the year end. “Production stagnated at a low level. A dynamic recovery cannot be expected,” the VCI said in March. It also noted at the time that demand was falling to a low level because of global weakness in industry, so the shift to manufacturing industry growth globally comes as welcome news. Unfortunately, the times when European chemical producers could look forward to taking full advantage of global industrial growth are probably in the past. Sector companies operate in a high cost environment which puts them at a competitive disadvantage compared to producers in other parts of the world. EU chemicals trade with the world’s largest consumer and producer of chemicals, China, was growing until 2022 but has declined since. Meanwhile China chemicals trade with Europe grew strongly from 2020, peaking in 2022. The chemicals trade balance turned negative in 2021 and was most strongly negative on a segment basis in 2022. The polyolefins picture is different with northeast Asia an important market for product from the EU plus the UK, as ICIS Supply and Demand Database information shows. But, as China continues to add capacity and moves towards much greater self sufficiency, the trade picture can be expected to change with opportunities diminishing. Splitting out petrochemicals the situation looks worse, although the EU trade deficit in petrochemicals with China retracted last year. Additional production capacities in China and relative domestic demand weakness had opened up opportunities for export to Europe while European prices remained relatively high. Europe will struggle to regain lost trade with the more dynamic industrial economies given its still-high cost base. The build up of capacities globally for some products put producers operating in high cost environments with older facilities at a distinct competitive disadvantage. If global manufacturing can continue in an expansionary phase and if more parts of the world move into that phase, then chemicals will benefit. The more cost efficient producers, however, would be expected to benefit disproportionately in the early phases at least of this industrial expansion. Insight by Nigel Davis ICIS Supply and Demand Database trade data visualisation by Yashas Mudumbai and Miguel Rodriguez-Fernandez


Singapore March manufacturing improves; external headwinds persist

SINGAPORE (ICIS)–Manufacturing activity in Singapore improved in March, boosted by higher export orders, but may remain weighed down in the near term by global economic weakness. The country’s purchasing managers' index (PMI) inched up to 50.7 in March, marking the seventh straight month of expansion, according to data from the Singapore Institute of Purchasing and Materials Management (SIPMM). A PMI reading above 50 indicates expansion in the manufacturing economy, while a lower number denotes contraction. Among sub-indices, new export orders rose to 51.4 in March from 51.3 in February, while output increased to 50.7 from 50.4 a month earlier. Supplier deliveries’ sub-index was the only one that continued to shrink in March, with a reading of 49.9 in March from 49.7 in February. Singapore is a major manufacturer and exporter of petrochemicals in southeast Asia. Its petrochemicals hub Jurong Island houses more than 100 global chemical firms, including energy majos ExxonMobil and Shell. Conditions were "possibly exacerbated by the disruptions in the Red Sea owing to geopolitical conflicts but the extent of contraction has been narrowing gradually", UOB Global Economics & Markets Research said in a note on Wednesday. In a separate survey of private manufacturers, Singapore’s March PMI eased to 55.7 from 56.8 in February, according to financial information and services provider S&P Global. Despite slowing from February, the rate of expansion remained strong and marked the 13th successive month in which business conditions improved in Singapore's manufacturing private sector. New orders for Singaporean goods and services increased for the 15th straight month and at the fastest pace since May 2023, S&P Global said. "This led to private sector output expanding at the joint-fastest pace since October 2022. Companies in the wholesale & retail sector reported the fastest increases in both new orders and output among the monitored segments," it said. MANUFACTURING RECOVERY TO BE UNEVEN While year-over-year comparisons may show gains due to the downturn in 2023, manufacturing momentum in the first half of 2024 could remain weak, UOB said. High global interest rates will continue to hamper external demand, with overall sentiment weighed down by property sector woes in China, the world’s second-largest economy. Supply chains may continue to face temporary disruptions due to geopolitical tensions in eastern Europe and the Middle East. A broader manufacturing recovery in Singapore, however, is possible in the second half of 2024 as central banks start easing monetary policy, fostering a rebound in investments and export demand. Focus article by Nurluqman Suratman Thumbnail image: A view of Brani terminal port in Singapore, 22 November 2023. (HOW HWEE YOUNG/EPA-EFE/Shutterstock)


Eurozone manufacturing activity slumps in March, UK returns to growth

LONDON (ICIS)–Eurozone manufacturing sector activity slumped further in March as a regional divide in performance continued to widen, with activity in the Mediterranean expanding and northern member states remaining mired in negative territory. The sector's purchasing managers’ index (PMI) slipped to 46.1 compared with 46.5 in February, a three-month low, as producers continued to reduce input purchases despite a decline in supply constraints from Red Sea freight disruption, according to S&P Global data. A PMI score of above 50.0 signifies growth. Growth expectations remained weak despite a gradual uptick in producer confidence as inflation continued to drop, driving hopes for rate cuts from key central banks and a stronger economic rebound. The overall eurozone sector PMI masks a sharp divergence in fortunes between key member states. Greek manufacturing activity hit a two-year high at 56.9, with Spanish and Italian production also increasing month on month. Production in the Republic of Ireland and the Netherlands was muted at near standstill territory, with output in France and Austria languishing at 46.2 and 42.2 respectively. The weakest performing key eurozone economy during the month was Germany, where output fell to 41.9, the weakest since late 2023. “The eurozone's manufacturing sector usually runs on several cylinders, mainly the Euro-4 countries of Germany, France, Italy and Spain. Together they account for three quarters of the eurozone's manufacturing industry,” said  Cyrus de la Rubia of Hamburg Commercial Bank, which helps to compile the PMI survey data. “We currently have the unusual situation that two cylinders, Germany and France, are more or less out of action,” he added. UK manufacturing showed signs of a recovery in March, jumping to 50.3 from 47.5 in February, and from a flash estimate of 49.9, marking the first time the sector has been in growth territory since July 2022. New orders and supplier delivery times continued to improve, while employment and stocks of purchases deteriorated, albeit at a gentler pace than in February. Domestic demand drove new business inflows, with export flows remaining muted. “Production and new orders returned to growth, albeit only hesitantly, following year- long downturns, with the main thrust of the expansion coming from stronger domestic demand,” said Rob Dobson, director at S&P Global Market Intelligence. Manufacturing PMI Country March 2024 February 2024 Austria 42.2 43.0 Ireland 49.6 52.2 Spain 51.4 51.5 Netherlands 49.7 49.3 Italy 50.4 48.7 France 46.2 47.1 Germany 41.9 42.5 UK 50.3 47.5 Greece 56.9 55.7 Thumbnail photo: A coal-fired power station in Mannheim, Germany. Source: Arnulf Hettrich/imageBROKER/Shutterstock


Latin America stories: weekly summary

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 22 March. NEWS AFPM ’24: LatAm petchems brace for slow path to recovery with all eyes on ChinaThe petrochemicals downturn in Latin America is likely to be the longest ever as Chinese and global overcapacities dampen prices in the world’s quintessential “price taker” region for chemicals. Brazil’s Braskem losses widen in 2023 on poor polymers markets Losses at Braskem widened further in 2023 to more than $900 million on the back of poor market dynamics in polymers, the Brazilian petrochemicals major said late on Monday. Brazil’s Braskem pushes polymers recovery to 2026 despite some green shoots Braskem’s said on Tuesday a recovery in polymers prices in earnest will now only take place from 2026, with the Brazilian petrochemicals major posting again a poor set financial result. Argentina’s manufacturing down 6% in Q4, sector hardest hit amid GDP contraction Argentina’s petrochemicals-intensive manufacturing output fell by 6% in the fourth quarter, year on year, making the sector hardest hit by the recession, the country’s statistical office Indec said on Wednesday. Mexico’s central bank joins monetary policy easing, cuts rates to 11% Mexico’s central bank cut this week the main interest rate benchmark by 25 basis points to 11%, finally joining other Latin American central banks in easing borrowing costs as inflation has fallen consistently. Brazil's central bank cuts interest rates to 10.75% Brazil’s central bank cut again this week the main interest rate benchmark, the Selic, by 50 basis points to 10.75%. Brazil’s farmers import 40% more urea in February before end of season In Brazil, urea imports in February were at 490,328 tonnes, up 40% from 349,452 tonnes in February 2023 as farmers stepped up purchases ahead of the close of the season, according to customs data. PRICING AFPM ’24: LatAm PE margins remain squeezed on imports Polyethylene (PE) imports are expected to remain high throughout Latin America during the second quarter, with deliveries from the US to continue dominating. AFPM ’24: Latin America PP demand still in doldrums, supply ample on high imports Latin America polypropylene (PP) supply is to remain sufficient in coming months due to lackluster demand, with a high level of imports still the predominant feature. AFPM ’24: LatAm PS supply to remain ample; demand to drop due to seasonality Latin America’s polystyrene (PS) supply is to remain ample as demand continues to be weak. Ethanol prices rise amidst stable supply and demand in Brazil Prices for hydrous ethanol were assessed higher this week, with stable supply and demand across the country.


INSIGHT: Controversial EU Packaging and Packaging Waste Regulation approaches adoption

LONDON (ICIS)–Details of the provisional agreement on the Packaging and Packaging Waste Regulation (PPWR) have been published, containing a number of wide-ranging elements which will reshape the packaging sector across the next two decades. The regulation is now reaching its final stages but has faced a fraught journey through the various legislative chambers of the EU and has remained divisive among both legislators and the markets. Under the provisional agreement the regulation will introduce: Mandated packaging recyclability Minimum recycled content and reuse targets across packaging – albeit with potential derogations based on availability of recycled material Mandatory deposit return schemes (DRS) and separate packaging collection targets New reporting and labelling obligations The extension of extended producer responsibility (EPR) schemes A restriction on the placing on the market of food contact packaging containing per- and polyfluorinated alkyl substances (PFAS) above certain thresholds A restriction on plastic collation films except for transportation purposes The possibility of bio-based plastic contributing to recycling targets The allowance of imports to count towards recycling targets provided they are of similar quality as domestic material and have been separately collected The Committee of the Permanent representatives of the Governments of the Member States to the European Union (Coreper) endorsed the Packaging and Packaging Waste Regulation on 15 March following amendments to the provisional agreement reached by the EU Parliament and EU Council (but not endorsed by the EU Commission) during the trilogue negotiations. The European Parliament Committee on Environment, Public Health and Food Safety (ENVI) endorsed the provisional agreement on 19 March. NEW RE-USE TARGETSBy 1 January 2030, 40% of most transport packaging used within the EU – including e-commerce – will need to be reusable and ‘within a system of reuse’. This includes pallets, foldable-plastic boxes, boxes, trays, plastic crates, intermediate bulk containers, pails, drums and canisters of all sizes and materials, including flexible formats or pallet wrappings or straps for stabilisation and protection of products put on pallets during transport. From 2040 this will increase to 70%.  Some players said that this amounted to a defacto ban on flexible plastic transport packaging because of the difficulty in reaching the reuse target. By 2030, 10% of grouped packaging boxes for stock keeping or distribution will need to be re-usable. Controversially, cardboard boxes will be exempt from these reuse targets, which could see an increased shift to the material. Dangerous goods transport packaging, large scale equipment transport packaging, and flexibles in direct contact with food and feed as defined in Regulation (EC) No 178/2002, and food ingredients as defined in Regulation (EU) No 1169/2011 will also be exempted. By 2030, distributors of alcoholic and non-alcoholic beverage sales packaging will need to meet a 10% reuse target, which will increase to 40% by 2040. Some classes of alcoholic beverage, including highly perishable alcoholic beverages will be exempted. RECYCLABILITY AND REUSEBy 2030 all packaging must be recyclable or reusable. To be classed as recyclable, packaging must be: Designed for recycling Separately collected Sorted in to defined waste streams without affecting the recyclability of other waste streams Possible to be recycled so that the resulting secondary raw materials are of sufficient quality to substitute the primary raw materials Packaging recyclability performance grades are to be established by packaging category and classified as grades A, B or C. After 1 January 2030 any packaging that falls below grade C will be restricted from sale in the market. After 1 January 2038 packaging classified below grade B will be banned from sale in the market. Under the legislation, along with design for recycling assessments from 2035 an additional assessment will be added based on the weight of material effectively recycled from each packaging category – with the packaging categories under the design for recycling assessment established in Article 6 paragraph 6 of the provisional agreement. The EU Commission will be given power to adopt delegated acts to establish the detailed criteria for the design for recycling criteria under the packaging categories, with criteria to be set-out by 1 January 2028. Also from 2035, a requirement that material be ‘recycled at scale’ will be added to the recyclability assessment, with the EU Commission able to amend the thresholds. The definition of packaging waste recycled at scale requires separate collection sorting and recycling of material across the EU as a whole (including of waste exports) in installed infrastructure for each of the packaging categories of at least 55% for all materials except for wood which requires at least 30%. Assessments of recyclability will include the impact on recycling systems of the inclusion of things such as barriers, inks and labels. By the end of 2026 the EU Commission will be required to prepare a report on ‘substances of concern’ that might negatively affect recycling or reusability, with additional restrictions added for those substances under recyclability assessments. Member states will be able to request the EU Commission consider restricting substances they consider detrimental to recycling. Within 7 years from the date of application of the regulation, the Commission will be required to evaluate whether the design for recycling requirements have contributed to minimising substances of concern. A five-year exemption on meeting recyclability targets will be given for innovative packaging, along with an exemption for medical goods and medical goods packaging, dangerous goods and packaging for food-contact material specifically made for infants. Sales packaging made from lightweight wood, cork, textile, rubber, ceramic or porcelain is also expected to be exempted from most of the recyclability requirements. MINIMUM RECYCLING TARGETS FOR THE PACKAGING CHAINUnder the provisional agreement, from 1 January 2030, or three years after the introduction of the related implementing act (whichever is later) all plastic packaging placed on the market in the EU must include a minimum percentage of recycled content from post-consumer waste – by weight – of: 30% for contact sensitive packaging (this is generally packaging that comes into contact with food or medical supplies), excluding single-use bottles made from polyethylene terephthalate (PET) as the major component 10% for contact sensitive packaging made from plastic materials other than PET, except single use plastic beverage bottles 30% for single use plastic beverage bottle 35% for all other packaging By 2040, this will increase to: 50% for contact sensitive plastic packaging made primarily from PET, except for single use plastic beverage bottles 25% for non-PET contact sensitive plastics, with the exception of single use beverage bottles 65% for single use beverage bottles and all other plastic packaging The recycled content targets will allow the use of material from ‘third countries’ – those outside of the EU – the allowance of which has been one of the most contentious and heavily lobbied parts of the bill on either side of the argument. Material from outside of the EU will need to have been separately collected, and have equivalent specification to the requirements listed in the PPWR, the Waste Framework Directive (2008/98/EC), and the Directive on the reduction of the impact of certain plastic products on the environment ((EU) 2019/904). Medical packaging, transportation of dangerous goods, compostable plastic packaging and food packaging for infants and young children will be exempt from the recycled targets. The Commission is obliged to adopt implementing acts establishing a methodology for the calculation and verification of these recycled percentages by 31 December 2026. The Commission will be able to amend the targets based on "excessive prices of specific recycled plastics" and on the grounds that the amount of recycled content would pose a threat to human health or result in non-compliance with Regulation (EC) 1935/2004 – or to any plastic part representing less than 5% of the total weight of the whole packaging, which would typically include things such as functional barriers. By 1 January 2028 the Commission will be required to assess the need for further exemptions from recycled content targets for specific plastic packaging based on a lack of suitable recycling technologies. It will have the power to introduce implementing acts to amend the recycled content targets based on those assessments. Member states will also be able to exempt economic operators from reuse targets for 5 years as long as: that Member State has reached 5 percentage points above the 2025 recycled targets for recycling of packaging waste per material It is expected to reach 5 percentage points above the 2030 target (as assessed by the EU Commission) It is on track to meet waste prevention targets under the PPWR It has reached a 3% waste prevention by 2028 compared with a 2018 baseline The economic operators have adopted a corporate waste prevention and recycling plan that contributes to achieving the waste prevention and recycling objective The five year exemption can be renewed by Member States provided the conditions remain filled. This would appear to lead to the prospect of uneven trading conditions across the EU. The targets will be calculated by year and manufacturing plant. The 2030 targets under the PPWR will replace the targets set out in the Single Use Plastics Directive (SUPD) from 2030, but the pre-2030 targets in the SUPD will remain. EPR schemes will be extended under the legislation and must be set-up to ensure that fees to producers (or those with producer responsibility in the case of imports) are sufficient to cover the ‘full waste management’ cost of packaging waste, but actual fees are not stipulated in the legislation. The provisional agreement states that players contributing to EPR schemes should be given priority access at market prices to recycled material corresponding to the amount of packaging placed in a Member State by each individual economic operator. SINGLE-USE PLASTICS, PACKAGING WASTE TO LANDFILL, AND PFAS BANSThere will be further bans on single-use plastics introduced by the PPWR, which remain broadly inline with those proposed in the EU Council’s bargaining position. Significantly, for the recycled low density polyethylene (R-LDPE) flexible market this includes a ban on plastic film wrap grouping bottles, cans, tins, pots, tubs, or packets together in multi-packs at point of sale, but will not include wrap used for business-to-business distribution. This could also impact on pyrolysis-based chemical recyclers because post-consumer flexibles have been identified by the sector as a potential key feedstock source. The agreement also includes a ban on food-contact packaging containing PFAS above certain thresholds. There will also be a restriction on sending packaging waste that can be recycled to landfill or incineration, which could result in a higher sorting requirements and costs for waste managers. BIO-BASED MATERIALBy three years from the entrance in to force of the PPWR the EU Commission will be obliged to review the state of technological development and environmental performance of bio-based plastic packaging. Following this, the Commission will be required to bring forth legislative proposals for targets to increase the use of bio-based plastics in packaging, this will include the possibility of bio-based material contributing to recycling targets for food-contact material where recycled material is not available. This is likely to impact most heavily on the polyolefins and polystyrene sectors. CHEMICAL RECYCLINGThe original commission draft appeared to clarify and support the use of chemical recycling as counting towards the targets as long as its end use is not for fuel or backfill. In a blow for chemical recyclers, however, the wording around definition of recycling has been removed, and now refers back to Directive 2008/98/EC which forms the basis of the majority of EU recycling legislation definitions. Directive 2008/98/EC defined recycling as “any recovery operation by which waste materials are reprocessed into products, materials or substances whether for the original or other purposes. It includes the reprocessing of organic material but does not include energy recovery and the reprocessing into materials that are to be used as fuels or for backfilling operations." This has left the legal status of chemical recycling uncertain, particularly for pyrolysis – the dominant form of chemical recycling in Europe – where mixed plastic waste is commonly converted to pyrolysis oil – a naphtha substitute – before being reprocessed into recycled plastics. MEMBER STATE TARGETS AND DEPOSIT RETURN SCHEMES (DRSs)Member state targets and obligations to implement DRSs remain broadly the same as in the EU Council’s bargaining position paper. The exception is that the figure on the collection figure for member states to exempt themselves from a DRS scheme has been increased to 80% by weight of applicable packaging placed on the market for the first time in 2026, up from 78% in the EU Council's bargaining position. The legislation's passage through the EU has been fraught, with the EU Commission objecting to the provisional agreement between the Parliament and the Council, and with widespread talk circulating in the run up to the vote that the members would not support it at Coreper. These factors are understood to be behind the last minute amendments. The regulation now faces a final approval vote in the EU Parliament’s April plenary session, if it passes that vote it will be adopted in to law. Insight by Mark VictoryAdditional reporting by Matt Tudball Clarification: recasts detail in 51st paragraph


Eurozone private sector moves closer to stability in March, UK firms

LONDON (ICIS)–The eurozone private sector came close to stabilising this month, driven by a more pronounced return to growth footing for services, but the disparity between a stronger southern Europe and ongoing weakness in France and Germany continued. Flash eurozone composite purchasing managers’ index (PMI) data for the month showed that business activity in the currency bloc firmed to 49.9, within striking distance of a growth territory after over a year of contraction. A PMI score of above 50.0 signifies growth. Improving fortunes for the eurozone private sector were driven predominantly by a jump in private sector demand, with the industry’s PMI jumping to 51.1 compared to 50.2 in February. The manufacturing sector continued to languish in recessionary territory, with a PMI of 46.8 in March compared 46.6 the previous month, the strongest performance in 11 months. Despite the tepid pace of improvement for Europe’s manufacturing sector, rates of order book volume declines moderated for the fifth consecutive month, according to data from S&P Global. Conditions were more robust for the service industry, but the pace of growth remains substantially below that seen this time last year, when depressed manufacturing sector conditions were more strongly offset by growth in the sector. A north/south divide in the eurozone recovery noted last month, with Spain and Italy firmly back on growth footing, France remaining subdued and output continuing to fall in Germany, has continued into March, according to S&P. “The downturn in France is more widespread than in Germany, with both the manufacturing and services sectors contracting. In Germany, on the other hand, it's only the manufacturing sector that is showing negative growth, while the services sector is broadly stagnating,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, which helps to assemble to PMI data. “None of this is encouraging, and compared to the eurozone economy as a whole, both economies are laggards,” he added. The UK’s economic recovery continued during the month but lost pace slightly in March, with composite PMI falling to 52.9 from 53 in February. Service sector momentum slowed during the month, falling to 53.4 from 53.8 on the back of pressure on household incomes, but manufacturing productivity rallied from 47.5 to 49.9 month on moth, close to stable footing, on the back of customer restocking. “Further robust expansion of business activity ended the economy’s best quarter since the second quarter of last year. The survey data are indicative of first quarter GDP rising 0.25% to thereby signal a reassuringly solid rebound from the technical recession seen in the second half of 2023,” said S&P Global chief business economist Chris Williamson. Thumbnail photo: Vehicle production at Volkswagen's Zwickau, Germany, site (Source: Martin Divisek/EPA-EFE/Shutterstock)


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