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HOUSTON (ICIS)–Despite the global softening
demand environment for recycled plastic resins,
Q1 2023 US plastic scrap trade data shows
increased import and export volumes in
comparison to the lull seen in Q4 2022.
US plastic scrap exports
uncharacteristically increase, driven by grades
of polyethylene (PE)
US plastic scrap imports rebound marginally
Canada and Mexico continue to be strong
trade partners
In light of the consistent downward trend in
plastic scrap exports over the last 10
quarters, Q1 trade data from the US Census
Bureau – noted by the HS code 3915 – shows a
reversal of trend with a 10% increase in volume
quarter on quarter.
In total, 107,714 tonnes of plastic scrap were
exported from the US this past quarter.
The last time plastic scrap exports increased
quarter on quarter was in the height of the
COVID-19 pandemic, which brought extreme
volatility to the recycled plastics markets.
Overall, the data suggests the decreasing trend
will continue year on year, as Q1 2023 volumes
remain 10% below those from Q1 2022.
In the last seven years, plastic scrap exports
have experienced a 79% drop when comparing 2022
to 2015, which represents the period prior to
the enactment of the Chinese National Sword
policy.
Plastic scrap derived polymers of ethylene, HS
code 3915.10, continues to be a primary driver
of US plastic scrap exports and was noted to be
one of the main contributors to the increase in
overall export volume in Q1.
As a major producer of virgin PE, the US market
heavily relies on the ability to export
material in order to balance the domestic
supply environment.
Among the top destination countries for US
plastic scrap exports were Canada, Mexico,
India, Malaysia and Indonesia, with Canada and
Mexico accounting for 54% of the overall
volume.
Intra-North American recycled plastic trade
relationships continue to show strength, as
Canada and Mexico not only dominate as plastic
scrap export destinations but also as top
sending countries for US plastic scrap imports.
In Q1 2023, Canada was responsible for 44% of
the total US plastic scrap imports, including
sending 40% of the total polyethylene
terephthalate (PET) scrap volume at 13,766
tonnes.
This comes as little surprise due to the
geographical advantages related to the
transport of plastic scrap and finished
recycled resins across US borders.
With respect to PET scrap imports specifically,
other top sending regions include Asia and
Latin America.
Overall, US plastic scrap import volumes
increased only 3% quarter on quarter and remain
down 14% year on year, coming in at 92,106
tonnes total.
Weakness in import volumes is likely linked to
the extreme market softness several grades of
recycled plastic continue to experience. Demand
remains pressured by the darkening economic
outlook, impacting all industries, from
consumer goods to construction.
Focus article by Emily
Friedman
09-Jun-2023
HOUSTON (ICIS)–Rates for shipping containers
from east Asia and China to both US coasts
surged this week following the successful
implementation of general rate increases
(GRIs), while container ships were starting to
back up at West Coast ports after a breakdown
in negotiations for a new labour agreement
between dockworkers and the ports, highlighting
this week’s logistics roundup.
According to online freight shipping
marketplace and platform provider Freightos,
GRIs implemented this week were partially
successful.
Judah Levine, head of research at Freightos,
said support for the GRIs could have come from
concerns of slowdowns at West Coast ports amid
renewed labour strife and the impact
it could have on effective capacity.
Levine said higher rates to the East Coast
could reflect low-water surcharges for
container ships traversing the Panama Canal.
Container ships 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), which are shipped
in pellets.
PANAMA CANAL
The Panama Canal Authority began imposing new
draft restrictions in April because of low
water levels amid a drought.
The PCA lowered the maximum authorised draft to
47.5 feet from 50 feet for neopanamax vessels
in April and lowered it further to 44.5 feet on
24 May and was scheduled to lower it to 44 feet
on 30 May.
The PCA postponed implementation of the 44-foot
restriction until 13 June after significant
rainfall fell in the region and plans to lower
it to 43.5 feet on 25 June.
WEST COAST LABOUR ISSUE
Container ships were backing up at West Coast
ports amid allegations that union labourers
were staging concerted and disruptive work
actions after negotiations for a new labour
agreement between dockworkers and the ports
seemed to break down.
The union denied taking any actions, but as of
Wednesday, there were six vessels in port whose
exits were being delayed, and four vessels at
anchor or due to arrive that were seeing delays
in getting a berth.
The list was compiled by MESC staff where the
agent specified by phone call or email that its
delay was because of a labour shortage.
“Basically, every container vessel is having
their schedule pushed back by about a day or
two,” MESC said. “The main cause I have seen is
due to lack of ‘lashers.’”
Lashers secure cargo on a vessel to avoid
shifting.
MESC said that some agencies either did not
want to comment as to the labour shortage being
the reason for vessel delays, or the emails
received containing schedules did not specify
the reason for a delay.
The Port of LA said it saw minimal impact to
some of its terminals on Friday but had to
close the gate for the afternoon at one of the
seven terminals in the complex on Monday.
A spokesperson for the port said all terminals
were open and operating on Tuesday.
LIQUID TANKER SHIPPING
Liquid chemical tanker rates from the US
outbound were stable to softer this week, with
decreases seen from the US Gulf to Asia and
from the US Gulf to Brazil.
Rates for liquid chem tankers from Brazil to
Europe, Asia and the US Gulf rose as the
country has more material available for export,
which is putting upward pressure on rates.
TRUCKING
The trucking market remains soft amid soft
consumer demand for goods following the
Memorial Day holiday.
FTR Transportation Intelligence said they saw
sharp drops in both spot volumes and truck
postings because of the holiday.
Total load activity fell 14.1% – the largest
drop of the year so far – following a decrease
of nearly 8% in the previous week, FTR said.
Volume was almost 41% below the same week last
year and about 23% below the five-year average,
according to FTR.
But rates have shown an uptick recently.
Data from Freightwaves Sonar showed slight
improvement in both spot and contract rates
this week, as shown in the following chart.
Focus article by Adam Yanelli
Additional reporting by Taylor Merrell
09-Jun-2023
HOUSTON (ICIS)–Passed in the Senate on the last day of
the legislative session, Connecticut lawmakers have recently
finalised the details of a recycled content mandate in
House Bill
6664, requiring plastic beverage containers sold in the
state to contain at least 25% post-consumer recycled (PCR)
content by 1 January 2027, which will then increase to 30%
PCR content by 1 January 2032. The bill is now headed to the
governor’s desk to be signed. These rates and dates come over
six months after the deadline set forth in the recycled
content related Senate Bill
928, passed in June of 2021. Per SB 928, the Commissioner
of Energy and Environmental Protection was to submit to the
governor and the General Assembly recycled content
requirements on 1 December 2022. Now, five states have active
recycled content mandates that apply to plastic products,
with two states, California and Washington, already in
action.
This comes at a time where some recycled plastic
resins, such as post-consumer recycled polyethylene
terephthalate (R-PET) are seeing flat to soft
demand due to the macroeconomic headwinds facing the
consumer goods industry. 2023 packaging sales volumes are
predicted to be flat to lower than in years past, resulting
in production cutbacks to avoid heavy inventory builds,
leading to less resin purchased overall, recycled or virgin.
Buyers are heard to be purchasing on a month to month basis
or flat out delaying orders in an effort to manage the
uncertain economic outlook. Despite the current soft
environment, long-term recycled content goals, both voluntary
and regulatory, suggest there is still much progress to be
made with regard to increasing recycled content percentages,
as noted by the most recent reports from the Ellen MacArthur
Foundation Global Commitment, as well as from California’s
2022 PCR content
mandate reporting cycle.
09-Jun-2023
Banning Russian gas exports to Europe might
become “a subject for consideration” as the EU
is focusing on potentially approving other
sanctions against Russia, the vice-president of
the European Commission for interinstitutional
relations Maros Sefcovic told ICIS in an
exclusive interview on 9 June.
He said EU countries have proven over the last
year they can manage without Russian gas but
added that any measures that might be taken
would have to be considered and executed with
“great care.”
Banning Russian gas “might become another
subject of our consideration because at this
time we are focusing on making sure there is
another package of sanctions that is being
approved,” the vice-president said.
“If there are further steps in that direction
it’s difficult to say now but we clearly have
proven we can manage without Russian gas.”
Since the start of Russia’s invasion of Ukraine
last year, Russia has reduced its pipeline gas
supplies to European buyers by more than 80%,
raising questions whether to ban pipeline
supplies ahead of the phase-out date proposed
by the EU in 2027.
In
an exclusive interview with ICIS, Walter
Boltz, energy advisor to the Austrian
government, said pipeline volumes could be
banned as early as this year.
Sefcovic said: “The phasing out of Russian gas
will happen sooner or later even without having
any explicit language in that regard. […] Of
course, when we say we are phasing out Russian
gas, we mean all of it but the question is how
are we going to check it, how are we going to
control it? LNG is a different animal from
pipeline gas. We have to look through with
great care to ensure that if we propose
something it’s properly executed.”
Sefcovic said the Commission is constantly
monitoring the circumvention of sanctions on
other commodities such as oil.
He said one of the critical measures adopted
over the last year was the introduction of a
requirement asking companies which subscribed
to the newly-launched AggregateEU platform to
sign a declaration of honour guaranteeing they
would not trade Russian gas.
AGGREGATEEU
The AggregateEU platform
was launched by the EU last year in a bid
to boost security of supply in Europe and
ensure consumers have access to cheaper gas
prices.
The first tender was held in May and new bids
and offers are expected from buyers and
suppliers between 26 June and 10 July, as
confirmed by Sefcovic in a speech held on 9
June.
Sefcovic, who was also commissioner for energy
and has been spearheading AggregateEU, said the
demand for gas via the platform was
“impressive” noting that in Energy Community
contracting parties such as Moldova and
Ukraine, which were also invited to
participate, buyers and sellers were matched
100% and 80% respectively.
One of the concerns raised by traders was that
the new platform may help them secure
below-market prices since participants would
still compete with each other for supplies.
GAS PRICES
However, Sefcovic said he received confirmation
from colleagues in an Eastern European country
that companies could secure prices below market
levels.
“I got a political assessment from a colleague
from an Eastern European country who said what
they got was significantly better priced than
what they were getting on the market. He said
if they we had more resources they could buy
much more.”
Following Russia’s invasion of Ukraine and the
drop in Russian exports, gas deliveries have
reversed their historical direction, flowing
West to East.
This has put landlocked central and eastern
European countries, which cannot access LNG, at
a premium over western European countries with
access to the sea.
LNG
Sefcovic said the Commission was also working
to ensure that more buyers, including those in
landlocked countries have access to LNG.
“The demand for gas [via AggregateEU] was
impressive but it was a bit atomised. We are
trying to work closely with companies which
want to act as central buyers.
“The advantage of the platform is that smaller
volumes can be grouped together and presented
to LNG suppliers because they have to work with
cargoes and they need to find a landing point,”
he explained.
Sefcovic did not comment on whether the new
arrangements implemented via AggregateEU could
replace the existing internal gas market.
However, he said that since the start of the
war and last year’s energy crisis, ‘structural
changes have happened, are ongoing and will
continue,’ noting that one of the most critical
structural changes to date is the phase-out of
Russian imports.
UKRAINE WAR RISK INSURANCE
The loss of Russian transit may also impact
Ukraine, the historical corridor for Russian
supplies to Europe, as the country is
contemplating securing a new role in Europe’s
energy market once the existing transit
contract expires at the end of 2024.
The EU is currently working with Ukrainian
stakeholders, European traders and western
political allies to establish a war risk
insurance that would allow companies to inject
gas in Ukraine’s vast storage facilities,
Sefcovic said.
The country has over 25bcm of capacity of which
10bcm can be used by European companies.
However, the war and political risk associated
with Ukraine is deterring some traders from
injecting and storing gas in the country.
“It’s clear [that because of the war in
Ukraine] we cannot rely any longer on the usual
model of insurance and reinsurance,” Sefcovic
said.
He conceded that Ukraine’s storage capacity
would be a “strategic asset” for European
energy security and admitted that any insurance
that would be put in place would require
political support.
“We are now trying to look into the matter how
we can compose that insurance package which
would simply allow the traders to go in and use
this very important Ukrainian facility.
“It will be very difficult to do it just by one
institution. We are talking to our
international financial institutions, our EU
banks, and also to member states’ promotional
banks as well as traders.
“We need to have some kind of shared risk to
lower the risk premium for everyone,” he added,
noting the Commission was working to get a
relevant instrument as soon as possible but he
could not give an exact time frame. Aura
Sabadus
09-Jun-2023
HOUSTON (ICIS)–Senior Editor for Recycled
Plastics, Emily Friedman, discusses the latest
developments in the US recycled polyethylene
terephthalate (R-PET) market, including
Present softening US PET bottle bale prices
ahead of the summer supply boost
Falling flake and pellet prices due to
competitive imports
Moderate to soft R-PET demand outlook for
rest of year
09-Jun-2023
HOUSTON (ICIS)–ExxonMobil expects to make in
2024 a final investment decision (FID) on a
chemical recycling plant and two other
projects, the company said on Friday.
The company’s ExxonMobil Baton Rouge division
in Louisiana is considering the chemical
recycling plant as well as a unit that will
produce ultra-pure isopropyl alcohol (IPA),
also known as isopropanol, and a polyolefin
thermoset resin plant based on technology
developed by Materia, a
business acquired in 2021, the company
said.
“The final investment decision will be in 2024;
we are currently assessing the scope and
economics of each opportunity and competing for
investment dollars on a global level,”
ExxonMobil said.
The company already has a commercial scale
chemical recycling plant at its complex in
Baytown, Texas, US.
That
plant started up in late 2022, and it is
able to process more than 36,000 tonnes/year of
plastic waste.
The plant relies on ExxonMobil’s
Exxtend process technology, in which
the plastic is heated under a limited oxygen
environment to produce pyrolysis oil or
naphtha-like products to be used in the
production of petrochemical products.
The polyolefin thermoset
resin is branded as Proxima, and
it is based on dicyclopentadiene (DCPD). The
resin is designed to be alternative to epoxy
resins, vinyl ester resins and unsaturated
polyester resins (UPR).
The materials can be used in a number of
applications, including wind turbine blades,
electric vehicle parts, construction and
anticorrosive coatings.
The resins are based on olefin metathesis
catalyst discoveries made by Robert
Grubbs and his research team at the
California Institute of Technology. Grubbs
received the 2005
Nobel Prize in Chemistry for these
discoveries.
The acquisition includes Materia’s headquarters
and technology centre in Pasadena, California
and its manufacturing facility in Huntsville,
Texas.
Additional reporting by Stefan Baumgarten
and Emily Friedman
Thumbnail shows plastic. Image by RICHARD
VOGEL/AP/Shutterstock
09-Jun-2023
LONDON (ICIS)–Iberdrola and Trammo have signed
a framework agreement for the purchase and sale
of up to 100,000tonnes/year of renewable
ammonia from 2026, it was announced 9 June.
The deal has sparked Iberdola to announce that
the company will build a renewable ammonia
plant in southern Europe with a total
investment of some €750m including European
funding.
The renewable ammonia plant will be supported
with the construction of 500MW of renewable
electricity generation assets to fuel the
plant.
The renewable ammonia produced will be
purchased by Trammo before being sold and
delivered to end users.
Renewable ammonia has been cited as a major
component of the global hydrogen economy, and
is could become the hydrogen carrier of choice
once trade flows begin to start in the coming
years.
Several large ports in Europe are building
ammonia import plants as well as ammonia
cracking facilities to extract the hydrogen
before being further transported via pipeline.
Moreover, many countries (Canada, Namibia,
Saudi Arabia for example) are due to export
renewable ammonia in large quantities in the
near future to maximise the ability for other
regions, especially Europe, to take advantage
of a large renewable resource elsewhere in the
world.
09-Jun-2023
HOUSTON (ICIS)–Demand for recycled
polyethylene terephthalate (R-PET) is expected
to remain moderate to soft in 2023 despite
long-term recycled content goals, resulting in
potential downward price pressure in the United
States.
To understand the US R-PET market, one must
look at the basics of each major price driver
including supply, demand production costs and
quality.
In terms of R-PET supply, the
ICIS Mechanical Recycling Supply Tracker
identifies nearly 120 mechanical recycling
sites in the US with a total R-PET capacity of
1.9m tonnes in 2022.
Approximately 80% of the US R-PET capacity
comes from post-consumer sources, primarily
post-consumer bottles, while the remaining 20%
is originated from post-industrial feedstocks.
Ten states in the US have bottle bill
programmes, also called deposit return schemes
(DRS), to encourage container recycling.
In addition, nearly 50% of the US R-PET
capacity is food grade, which is a requirement
for recycled resins to be used in new beverage
containers.
US R-PET mechanical recyclers
footprintSource: ICIS,
Recycling Supply Tracker – Mechanical,
2023
Evolving state regulations and voluntary
brand-owner pledges to increase the use of
recycled material are the main sustainability
related demand drivers in the US in the long
term.
California’s minimum recycled content mandate
for plastic beverage containers came into
effect on 1 January 2022. Washington State and
New Jersey have passed similar bills with
recycled content mandates that start in 2023
and 2024, respectively, and include more
product categories such as non-beverage
containers, plastic carryout bags, and trash
bags.
Maine also passed a law requiring recycled
content for plastic beverage containers
starting in 2026.
Despite future requirements to use increasing
amounts of recycled plastic, current R-PET
supply is healthy, borderline in excess, to
meet today’s demand.
From bottle to pellet, recycling costs include
feedstock costs as well as other production
costs. The key difference between the recycled
and virgin resin markets is feedstock source,
as the recycling industry uses plastic waste –
a volatile material in terms of quality,
availability, and price. Furthermore, recycling
production costs have risen in tandem with
higher labour and electricity costs, and higher
financing rates across the nation.
For recyclers, the challenge is to remain
viable as a business, but also competitive to
virgin resin prices to compete with some
customer bases, which can cannibalise margins
or flat out lead to production losses.
The quality of recycled resins influences both
demand and price, according to their
performance, colour, and end-markets.
The US market has traditionally used bottle
flake most significantly in fibre applications,
but the bottle-to-bottle market has grown
strongly in recent years, given the
sustainability agenda for fast-moving consumer
goods (FMCGs).
The demand for closed loop recycling, in a food
contact application, also drives up the quality
requirements in feedstock and recycle product.
This increases prices for the highest quality
clear PET bales as well as create the premium
for food grade R-PET.
ECONOMIC CONDITIONS WEAKEN
DEMANDUS R-PET demand
traditionally was dominated by the fibre
industry, but due to current economic headwinds
related to fibre products such as textiles or
carpet, end market demand has been weak
throughout 2023.
Demand from the consumer goods companies,
including bottled beverage producers, is
currently flat despite long-term recycled
content goals.
While some consumer goods companies continue to
purchase R-PET to meet their voluntary or
regulatory targets for recycled content, the
current economic headwinds have influenced
other buyers to delay or limit orders of
higher-cost recycled resins.
The prices of virgin resin still have an
influence on the demand for recycled materials
for cost-sensitive buyers.
When the delta between virgin and recycled
feedstocks expands, in favour of virgin as the
lower cost feedstock, buyers can be drawn
towards a higher mix of virgin resin. This has
been very evident in the market this year, as
the economically incentivized client has
shifted the focus to managing costs rather than
driving plastics circularity.
The combined market conditions have resulted in
downward price pressure in the US for most
recycled resin grades. For instance, according
to Emily Friedman, Recycled Plastics Senior
Editor at ICIS, “spot market colourless
post-consumer R-PET flake and pellet prices
have dropped across the US, reflecting
continued demand weakness paired with pressure
from competitive import cargoes”.
In the next couple of months, R-PET demand is
expected to remain soft, despite historical
expectation of peak bottled beverage demand
during summer season.
Although sustainability-driven buyers are
expected to maintain demand for US R-PET
consistently, cost-driven buyers may switch
back to higher volumes of virgin PET in their
feedstock mix, especially as virgin PET prices
drop due to ongoing destocking in the United
States.
In the next couple years, the market is
expected to recover in preparation for the
regulatory and voluntary recycled content
targets. The return of demand is expected to
put upwards pressure on R-PET supply and,
therefore, prices in the near term, until there
is substantial expansion in supply.
Insight by Paula Leardini
09-Jun-2023
LONDON (ICIS)–The ICIS Northwest Europe
ammonia-to-hydrogen assessment continued to
fall in value as downward pressure on prices
came from a weak ammonia market.
The ammonia-to-hydrogen northwest Europe
assessment fell by an additional €0.03/kg on a
weekly basis to stand at €4.15/kg on 8 June,
losing value for the third straight week and
less than half the €8.96/kg valuation from
early January.
The cost in the Netherlands for low carbon
steam methane reforming (SMR) hydrogen rose
€0.23/kg on a weekly basis to reach €2.80/kg on
8 June after having dropped back to €2.57/kg at
the start of the month, but still stood below
the ammonia-to-hydrogen equivalent.
Baseload electrolysis in the Netherlands also
rose as June progressed, pushed higher by the
recovery on the European gas hubs, standing at
€5.60/kg on 8 June after having dipped below
the €5/kg mark at the beginning of June.
AMMONIA MARKET
Ammonia pricing continued to come under
pressure from weak buying interest with Europe
seeing particularly low ammonia consumption at
the moment.
Indeed, market participants are expecting
further declines in pricing with the European
Commission contemplating extending the
suspension of the 5.5-6.5% import duty on
ammonia and urea from all origins except Russia
and Belarus.
Some demand was heard from Turkey for early
June cargoes, but US ammonia demand was seen as
very low and production in Trinidad is back to
normal levels as feedstock issues have been
resolved.
GAS MARKET
The ICIS Dutch TTF July ’23 contract showed
some signs of finding some support at the
beginning of June, recovering from posting
multi-year lows recorded right at the start of
the month.
Additional concerns over Russian gas supply
into the region in conjunction with demand
potentially picking up in pace as temperatures
increase and air-conditioning demand kicks in
led to a recovery in the TTF prompt.
Gas stocks continue to grow at a slower pace
than in previous years, with European stocks
beginning 9 June with 196TWh in stock compared
to 134TWh at the same time last year, ICIS data
showed.
However, stocks were 68TWh higher on an annual
basis at the beginning of June and were 81TWh
up year on year at the start of May, the data
showed.
09-Jun-2023
LONDON (ICIS)–Senior editor for recycling,
Matt Tudball, discusses the latest developments
in the European recycled polyethylene
terephthalate (R-PET) market, including:
Prices drop across almost all market
sectors
Demand remains well below expectations
R-PET vs. PET debate continues
09-Jun-2023
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