China's Recycling Market is in Troubling Waters, Putting Pressure on Recycled Polymers’ Prices

The Recycling market in China is facing its worst crisis in years as demand from international and domestic has declined significantly in recent times. Foreign countries are showing diminished interest in buying electronics, textiles, and plastic toys from China, causing a decreased need for recycled plastics and hence, a drop in their market value. The inventories are full of sufficient supplies, already enough to cater to the overall domestic demand. Since inventories are overflowing, the existing raw materials do not have value or use.

As per the ChemAnalyst data, recycled High-Density Polyethylene (R-HDPE) prices dropped by 1.16% from the last week, and the evaluated price of R-HDPE Blow Moulding was USD 850/MT at Spot, during the week ending with April 1st. Likewise, Recycled Polypropylene (R-PP) prices fell by 1.03% from the previous week's prices. The R-PP injection moulding prices were assessed at USD 960/MT FOB during the week concluding with April 1st. The crippling recycled market is one of the primary reasons behind these price declines. Moreover, the ongoing restrictions owing to the new Covid-19 variant have restricted the market activity, resulting in lesser demand for several commodities, including R-HDPE and R-PP.

There are some structural issues in China, which are inducing depression in the market, like the people who used to collect or sort plastic wastes are not interested in doing so anymore, threatening the future of the Recycling market in China. People don't want to work as waste collectors or sorters due to the filthiness and the risk involved. Only a few people who do not have any other option choose to do such work, and it can be a genuine concern for the recycling market. Besides, the collection of post-consumer bales was already lagging globally, and a lesser manual workforce is most likely to worsen the situation. In addition, the economic crisis occurring worldwide due to the conflict between Russia and Ukraine is impacting the Chinese Recycling Market.

According to ChemAnalyst, "The bearish demand for R-HDPE and R-PP would cause noticeable drops in the prices of both these commodities in the upcoming weeks. The slump in the Recycled market is most likely to support the declining R-HDPE and R-PP market values."