Recycled polyolefins (R-PE, R-PP)

HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US fell this week, but carriers have announced an increase in blank sailings so they can tighten capacity and maintain a floor on prices. Rates have been falling steadily since July as importers pulled forward peak season volumes to get ahead of the dock workers strike at East Coast and US Gulf ports. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said some carriers added blank sailings on Asia-to-US routes. Last week, Mediterranean Shipping Co (MSC) announced four blank sailings on its Asia-USEC 2M service, citing ongoing congestion at some ports related to the brief work stoppage. Levine said the action could also be to maintain a floor on rates. Global average rates fell by 4% and are just above $3,000/FEU (40-foot equivalent unit), according to supply chain advisors Drewry and as shown in the following chart. Rates to the East Coast fell by 6.1% to around $5,200/FEU, with rates to the West Coast falling by 2.6% to around $4,800/FEU, as shown in the following chart. Transpacific rates are now about 30% below the July peak, and Levine expects them to continue to soften as the market is in a slow period between the end of the Christmas holiday peak season and the Lunar New Year. “As long as Red Sea diversions continue to absorb capacity on an industry level, prices may not fall much further than seen back in April,” Levine said. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES FLAT TO LOWER Overall, US chemical tanker freight rates were softer this week for several trade lanes, in particular the USG-to-Brazil and USG-Asia trade lanes as spot tonnage remains readily available. There has been limited spot activity to both regions and COA nominations are taking longer than usual. The vessel owners have tried to delay the sailings but there has been very little spot interest in the market leaving no other options for full cargoes and in turn impacting spot rates. On the transatlantic front, the eastbound leg remains steady as there was ample space available, which readily absorbed the few fresh inquiries for small specialty parcels stemming from the USG bound for Antwerp. Various glycol, ethanol, methyl tertiary butyl ether (MTBE) and methanol parcels were seen quoted to ARA and the Med as methanol prices in the region remain higher. Additionally, ethanol, glycols and caustic soda were seen in the market to various regions. Additional reporting by Kevin Callahan

25-Oct-2024

LONDON (ICIS)–Senior editors Caroline Murray and Matt Tudball interviewed Marco Piscitelli, founder and CEO of International Gate, at the company’s customer event in Verona, Italy on 23 October to get his views some of the key topics impacting the European polyethylene terephthalate (PET) and recycled PET (R-PET) markets, including: ‘Theoretical’ global oversupply of PET and how freight, energy costs and economics all play a part in the market The importance of customers finding the right partners to navigate challenges in 2025 The ‘Recycling Revolution’ and the impact of the Single Use Plastics Directive (SUPD) The ‘chaos’ around the lack of legislative clarity facing the PET and R-PET markets in 2025 Suitability of single pellet solutions (SPS) for brands with high recycled content targets.

25-Oct-2024

HOUSTON (ICIS)–US recycled plastics Senior Editor Emily Friedman and Americas recycled plastics Analyst Josh Dill, reflect on their experiences and key takeaways from the 2024 Paper and Plastics Recycling Conference held in Chicago, Illinois this week. Listen in as they dive into various topics regarding material recovery facilities (MRFs), extended producer responsibility (EPR), recycled content brand commitments, chemical recycling and more.

24-Oct-2024

LONDON (ICIS)–Plastics Recyclers Europe (PRE) has called on the EU to restrict imports of material failing to meet the EU’s environmental requirements to bulwark the industry against recessionary pressures, the industry association said in a press release on Thursday. The press release cited recommendations in a report by Mario Draghi on EU Competitiveness, and stated that “Creating a level playing field will be key to making the green transition sustainable and safeguarding the competitiveness of the EU’s industry in the long run.” The press release also called measures and targets introduced in core EU legislation “unrealistic,” given what it perceives as stalling growth in the sector, “as capacities would need to at least double by 2030.” The press release calls on the recently elected EU institutions to enact immediate measures to “solve the key issues threatening the existing plastics sorting and recycling infrastructure, as well as future investments. Without these measures, the future of European plastic recycling appears uncertain.” PRE listed a number of challenges facing the sector, including limited investment in domestic recycling, an increase in imports of recyclates from outside the EU, and increasing lack of demand for recyclates produced in Europe. “These issues are feeding the existing recession on the market – driving many recycling companies out of business in 2023, with further closures happening or planned in the course of 2024. This downturn will continue unless the situation is addressed urgently,” the press release stated. PRE cited its PRE Plastic Recycling Industry Figures in Europe, 2022 study (the latest year for which data is available) as evidence of underinvestment, highlighting a drop in growth of installed recycling capacity in Europe to 10.6% year-on-year in 2022, down from 17.7% in 2021. PRE estimated year-on-year recycling capacity growth (in millions of tonnes/year) Percentage increase year-on-year 2018 0.6 9.99999 2019 1.9 28.8 2020 1.1 12.94 2021 1.7 17.7 2022 1.2 10.61 Average since 2017 1.3 16.009998 *source: extrapolated from PRE Plastic Recycling Industry Figures in Europe, 2022 European recycling capacity in 2022 stood at 12.5 million tonnes/year, according to PRE estimates. If the 10% growth rate estimated by PRE in 2022 were to continue in the subsequent years to 2030 this would result in a capacity increase to just under 27 million tonnes/year and a growth from 2022 of just over 114%. Nevertheless, if market capacity were to grow at a consistent capacity year-on-year increase to 2022 of 1.2 million tonnes/year, this would result in around 22.1 million tonnes/year of capacity by 2030, an increase from 2022 of just under 77%. The long-term average yearly growth since 2017, according to data from PRE’s study is 1.3 million tonnes/year, this would result in approximately 22.9 million tonnes/year of capacity by 2030 at a consistent rate, an 83% rise in capacity from 2022. Headline figures do not tell the whole picture for recycling capacity because of the wide variation in technical properties of different grades of recycling material, which limit usage of multiple grades in key end-use applications such as packaging. 2022 saw record high prices for recycled polyolefins, and multiyear high prices for R-PET because of supply shortages across the chains and rising demand because of regulatory and consumer pressure. Prices and demand fell back was in 2023 due to the energy cost crisis, followed by the cost-of-living crisis. PRE also named the influx of imports as the primary issue facing the market that needs addressing by regulators. "Many recyclers are struggling to survive in a market flooded with uncontrolled imports that fall short of EU requirements,” Ton Emans, Plastics Recyclers Europe’s President, was quoted as saying in the press release,. As evidence of the damaging role of imports, PRE cited a study it published in February 2024. That study was solely focussed on recycled polyethylene terephthalate (R-PET). High freight costs and unfavorable exchange rates have limited the arrival of imports from Asia in 2024 across recycling markets. But falling freight rates in recent weeks have reopened the arbitrage window for R-PET flakes. Imports of recycled polyolefins in to Europe have historically been considerably less common than imports of R-PET and have been particularly limited in 2024, with macroeconomics largely unfavorable. PRE estimates that recycled polyolefins and R-PET account for around 80% of market capacity for recycled polymers. Demand in 2024 across these recycled polymers has become increasingly fragmented by grade, end-use, location, and individual player circumstances. Buying interest across the majority of non-packaging applications remains weak, with construction offtake particularly limited. Display packaging demand for recycled polyolefins has remained more robust due to the onboarding of projects from the sector during Q4. This has been driven by a variety of factors, including:- The restarting of packaging projects previously delayed in 2023 The approach of 2025 fast-moving consumer goods (FMCG) recycling targets and FMCG players looking to broaden the range of materials they use to help meet those targets Ambitious recycled content mandates forming part of the proposed Packaging and Packaging Waste Regulation (PPWR), which have led some buyers to seek to establish relationships with new suppliers to pre-position themselves R-PET colourless flake and food-grade pellet demand, meanwhile (which typically serve packaging applications), varies from seller to seller with some seeing good demand and order volumes, while others choose to build stock ahead of an anticipated pick up in demand in 2025. Some sellers are less happy with the current mood however, and there are concerns that high stocks and the bearish PET outlook could lead to tougher price talks in November and December. Buyers in the sheet sector, in particular, can afford to be more selective with their R-PET flake purchases as they are not subject to the Single Use Plastics Directive (SUPD) target that requires 25% R-PET in PET beverage bottles from 1 January 2025. Focus article by Mark Victory Additional reporting by Matt Tudball

24-Oct-2024

LONDON (ICIS)–Markets Editor Stephanie Wix is joined by Senior Editor Manager Vicky Ellis, markets reporter Meeta Ramnani, and Senior Analyst Jincy Varghese, as they discuss the key trends from the 29th Fakuma plastics processing trade fair in Friedrichshafen, Germany, in this latest ICIS podcast. They explore discussion topics heard at the event last week, from the highest concerns to the lowest expectations. They also explain the clash of pessimism and optimism between markets including acrylonitrile butadiene styrene (ABS), polycarbonate (PC), polyethylene (PE) and polypropylene (PP), and also engineering plastics polyacetal (POM) and polybutylene terephthalate (PBT).

22-Oct-2024

BARCELONA (ICIS)–Changing trade flows driven by increasing friction between China, the US and their allies mean there will be demand for new chemical logistics routes and infrastructure, according to the executive chairman of chemical logistics group Bertschi. As direct chemical exports from China to the US decline, and more trade barriers go up, countries in Eastern Europe, southeast Asia plus Mexico and Turkey are acting as a stopping off points for indirect exports, while new chemical manufacturing also springs up in these areas, said Hans-Jorg Bertschi. He said: “The geopolitical situation also plays an important role – there are two blocs now – western countries and the BRICs (Brazil, Russia, India, China) led by China where we see a certain fragmentation of global trade. Chemical flows between China and the US are shrinking and we also now see a lot of triangulation trade where bridge countries in between take advantage of the situation.” Speaking on the side lines of the European Petrochemical Association’s annual conference in Berlin, he explained that China now transports a lot more chemicals to Mexico, where local manufacturers add value and then export finished goods to the US. Chemical producers – some from China – are building plants and businesses in Hungary and Turkey. There is also a flurry of activity in Morocco, India and Vietnam, which are all changing trade patterns around the globe, the executive believes. He said: “The reality is that new countries are emerging, which I call bridge countries between the blocs – some do not yet have the right chemicals infrastructure so here I would expect to see more investment in chemical logistics and supply chain infrastructure where there is growing local demand in addition to demand from regional fragmentation.” OTHER CHEMICAL TRADE FLOWS ALTER Bertschi pointed out that there is a clear increase of imports from the US to Europe based on the US feedstock advantage and growth of new-build facilities which are very efficient. “This has been going on for 3-4 years and will develop further. If you look at the average cracker size in Europe it’s about 350,000 tonnes/year whereas new world scale crackers are around 1 million tonnes/year. Also the average age of Europe’s crackers is 40-50… so I expect to see more closure announcements here, and more imports from the US, the Middle East and eventually from China.” CHEMICAL RECYCLING WILL DRIVE NEW LOGISTICS The chemical recycling sector is growing, with 83 projects in Europe alone recorded in the ICIS Recycling Supply Tracker – Chemical.  Globally the database records 173 sites and this nascent part of the chemical industry will create some completely new logistics requirements and trade flows according to Bertschi. He pointed out that the current linear model for chemical production just requires oil and gas to move mainly by pipeline to refinery and cracker sites. The finished products –  chemicals and polymers – are then distributed to downstream customers. The circular economy creates new flows of material which will require logistics support: “But now, with renewables, we have new flows of product which will require inbound logistics to deliver feedstocks into these plants. Pyrolysis oil will then be produced across regions which will require complex inbound logistics to refineries.” Bertschi has started placing storage centers near to crackers, plus heating and testing facilities for pyrolysis oil, which is a product of chemical recycling which can be used as a circular feedstock for chemical production. “This is not homogenous – it needs to be analysed before it is put into a cracker.  Previously just a pipe was needed but now complex inbound logistics will be required. We will import pyrolysis oil from across Europe and the US and some of this is already happening – this is at the beginning but it is becoming one of our growth drivers.” Interview by Will Beacham Image credit: Georgios Tsichlis/Shutterstock

22-Oct-2024

SINGAPORE (ICIS)–The short-term demand outlook for recycled polymers from Asia remains sluggish especially for low-value grades, mainly due to poor economics and brand users’ preference of cheaper virgin plastics. Upcoming regulation in deep-sea regions fails to support Asia recycled polyethylene terephthalate (rPET) exports Asia recycled polyethylene (rPE), recycled polypropylene (rPP) remain traded mostly in domestic markets Investments into recycling continue across Asia despite weak demand In this chemical podcast, ICIS senior editor Arianne Perez discusses recent market conditions with an outlook ahead in Asia.

22-Oct-2024

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: The recent clamor about new economic stimulus in China didn’t change anything. After initial stock market rallies, investors parsed the details and realized that Beijing was either unable or unwilling (it is surely a combination of both) to redirect the economy towards much greater domestic consumption and away from investment. It is what it is. The only question now is how low Chinese chemicals demand growth will go over the next decade and more. Will we see a negative growth in some years for some products, especially those tied to construction? Today’s main average polyethylene (PE) margins in northeast Asia between January 2014 and 18 October this year, weighted according to the estimated percentage shares of the three grades out of toral production in each of the 11 years from 2014 until 2024. As LDPE accounted for an average of just 16% in 2014-2024 versus 46% for high density PE (HDPE) and 38% for linear low density PE (LLDPE), then of course more weight was given to the margins of the latter two polymers. Despite all the sound and fury of the recent stimulus: Margins during the Chemicals Supercycle, from January 2015 until December 2022, averaged a positive $435/tonne. From January 2022 until August 2024 (before the most recent stimulus), they averaged minus $32/tonne. From January 2022 until 18 October 2024 (including post-stimulus), they averaged minus $29/tonne; from 1 September-18 October, the margins were at a positive $25/tonne. In other words, the most recent stimulus has barely moved the needle towards returning the northeast Asia PE business to a health condition. Chemicals and polymers are a very good barometer for broader economies. A view from this year’s European Petrochemical Association (EPCA): three to nine years before a full recovery This year’s EPCA in Berlin appeared as if it was attended by more senior executives than is usually the case. “Normally, companies send junior- to mid-level executives to the EPCA, but on this occasion more senior leaders were present because they wanted to try and gauge what happens next,” said one contact. I got the sense from my conversations at EPCA that there is recognition at board levels that the global chemicals industry is it an inflection point, not just because of events in China. The last chart in today’s post is a means of getting the debate going about the wider transformation taking place. Back to the downturn and China. Everyone I spoke to at EPCA recognized that China was front and center of the downturn, given the type of data I presented above. Estimates of when a full recovery might arrive ranged from a further three years to as many as nine years. But there was also a recognition, as the above chart suggests, that we may never fully return to the old market conditions. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

22-Oct-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 18 October. NEWSArgentina’s Rio Tercero shuts TDI plant on global oversupply Petroquimica Rio Tercero has shut its toluene di-isocyanate (TDI) plant in Cordoba on the back of global oversupply, a spokesperson for the Argentinian producer confirmed to ICIS on Tuesday. Brazil’s higher chemicals import tariffs kick off Brazil’s higher import tariffs on dozens of chemicals kicked off on Tuesday after the government published them on the Official Gazette late on Monday. Brazil’s Senate approves EU Reach-like rules to increase chemicals control Brazil’s Senate approved on 15 October the creation of a National Inventory of Chemical Substances aiming at “reducing negative impacts” of toxic chemicals on human and environmental health. PRICING Mexico PE domestic prices lower on weak demand, ample supplyDomestic polyethylene (PE) prices dropped in Mexico due to weak demand and ample supply. In other Latin American countries, prices were unchanged. Brazil hydrous and anhydrous ethanol sales surgeIn Brazil, 1.73 billion liters of hydrous ethanol were sold by Center-South units, representing a 4.36% increase over the same period in the previous harvest. This expansion demonstrates the domestic market's ongoing need for hydrous ethanol. Dow plans maintenance at LLDPE unit in Argentina – sourcesDow is having a scheduled maintenance at its linear 310,000 tonne/year low-density polyethylene (LLDPE) plant in Bahia Blanca, Argentina, until 5 November, according to market sources. Chile, Peru international PP prices drop on lower Chinese offers International polypropylene (PP) prices dropped in Chile and Peru on the back of lower offers from China. Chinese offers retreated this week, after rising the previous week due to higher crude oil prices.

21-Oct-2024

LONDON (ICIS)–Join global analyst team lead for recycling Helen McGeough as she looks ahead to the 3rd ICIS Recycled Polymers Conference on 7 November in Berlin and tells Matt Tudball what she's looking forward to seeing from the diverse group of topics and presenters, including: Waste collection challenges and developments ICIS study on penetration rates of recycling in the wider virgin polymer market Chemical Recycling and its impact on the market Investment in recycling for low carbon solutions Prices of feedstocks impacting the recycled polymers chains 3rd ICIS Recycled Polymers Conference | Europe Hotel Palace Berlin, Germany | Conference: 7 November Training: 6 November You will be able to hear from out ICIS experts on the following session: Set the scene with ICIS: The European plastics recycling market landscape Panel discussion: Waste collection challenges and developments ICIS insight on pricing trends for plastics, mixed plastic waste and pyrolysis oil To discover more and register you place click here > https://events.icis.com/website/11605/home/

21-Oct-2024