For the Quarter Ending March 2023
In the first quarter of 2023, the Recycled Polypropylene market in the Middle-Eastern market observed mixed sentiments. The offers were dropped during the first half of the quarter, followed by the rebound in the second half of the quarter. In the Saudi Arabian market, the offers plunged during the first half of the quarter due to the lacking demand from the prominent markets. There were several inquiries at the staring of the quarter as the Chinese players rushed to restock inventories ahead of the festive season. Whereas the European players are highly cautious about the market developments as the inflation and rising interest rates slowed the market competitiveness. As a ripple effect, the Ex-Riyadh discussions for R-PP were assessed at USD 885 per tonne during the quarter ending March 2023.
Overall the Recycled Propylene market in the APAC region observed a signific improvement during the first quarter of 2023. The offers quoted in the prominent economies observed a consistent surge in the offers quoted in the domestic market. This development is predominantly supported by the rebound in the market activities in China, and the authorities have eased the COVID restrictions followed by the festive season in the region resulting in consistent fluctuation in the market competitiveness amongst the market players. At the same time, the demand outlook has remained healthy and staggered upward slowly. In addition, major Indian market players claimed that the participation of the East Asian players had soared tremendously as the Chinese lunar new year holidays ended. As a ripple effect, the Ex-Shenzhen discussions for Recycled PP injection molding grade were assessed at USD 939 per tonne during the quarter ending March 2023.
In the first quarter of 2023, the Recycled Polypropylene market in the European market has observed a staggering downward trend. Initially, since the quarter started, the market sentiments have remained dull, and the competitiveness amongst the market players has persistently prevailed the impact from the last quarter. At the same time, the market analysts were assured that the upcoming recession, coupled with the instability in the energy market, has weakened the supplier's will to reduce the offers in the domestic market. As a ripple effect, the FD Hamburg discussions for R-PP natural pellets were settled at USD 2020 per tonne during the quarter ending March 2023.
For the Quarter Ending December 2022
In this quarter, the price of Recycled Polypropylene decreased in North American markets as well as Asian and European markets. When it comes to the U.S., the decline in upstream crude oil prices had a substantial effect on this commodity's cost. They were only passingly interested in this product because downstream businesses preferred virgin PP for their manufacturing activities. As a result, the market occasionally experienced an oversupply of this product. However, for the majority of the time, this product's prices remained relatively constant due to the stability of the demand-to-supply ratio.
Recycled Polypropylene saw mixed market sentiments throughout the entire Asia-Pacific region during this quarter as well. In China, this product's price increased in the second week of October and remained stable for some time. However, it decreased in the final week of November and remained the same until the quarter's conclusion. Because they were having difficulty producing as a result of the implementation of Covid -19 curbs, the downstream businesses' decreased demand for this product was the cause of the price drop. This quarter saw a decline in the price of this product in India. The market was primarily driven by the level of demand that textile and kitchen utensil manufacturers were demonstrating for R-PP for their production purposes. The decrease in the cost of crude oil also had an effect on this product's price.
This quarter saw a decline in the Recycled Polypropylene market in Europe. In Germany, the price of this product began to decrease in the third week of October, remained stable for some time, decreased twice more in December, and remained the same for the remainder of the quarter. Due to the ongoing conflict between Russia and Ukraine, the textile and kitchen utensil manufacturing companies were more concerned about increased energy costs and restricted their production, significantly reducing market demand for this product. As a result, there was sufficient stock of this product to satisfy typical market demands. The happenings in the upstream crude oil market also had an effect on this product's price.
For the Quarter Ending September 2022
Just like the Asian and European markets, the price of Recycled Polypropylene stepped down in North American markets too in this quarter. Due to the fact that downstream businesses preferred virgin PP to this product for their manufacturing activities, they were only showing a passing interest in it. As a result, there was occasionally an oversupply of this product on the market. However, due to the stability of the demand-to-supply ratio, this product's prices remained relatively constant for the majority of the time. Due to the heat of the summer, the PP recycling companies shut down their facilities.
Recycled Polypropylene was witnessing mixed market sentiments in the whole of the Asia-Pacific region this quarter. When it comes to China, the cost of this product got enhanced in the month of July. However, it started to decline from the next month and continued falling till the end of this quarter. The downstream businesses' reduced demand for this product was the cause of the price drop because they were having trouble producing due to power outages. Due to power supply uncertainties, upstream companies had to reduce their manufacturing rates as well. The price of this product was also affected by lower crude oil prices. Hence, R-PP closed its market in China this quarter at USD 880 per MT (for injection molding grade) on a spot ex-Shenzhen basis. In India, the price of this product was witnessing ups and downs this quarter, and the market was driven primarily by the degree of demand that the textile and kitchen utensils production companies were exhibiting for R-PP for their production purposes.
The European market of Recycled Polypropylene was seeing ups and downs this quarter. The cost of this product came down in July and got enhanced in the next month and dropped again in September. The textile and kitchen utensil manufacturing companies, who were more concerned about skyrocketing energy costs and erratic power supply, which had hampered their production activities significantly, were the primary drivers of this product's demand in the market. The price of this product was also affected by the events that were going on in the upstream crude oil market. So, R-PP ended its market in Germany this quarter at USD 2,310 per MT (for natural pellets grade) on an FD – Hamburg basis.
R-PP market remained strong in the second quarter of 2022 amid stable upstream Polypropylene prices. The price trends of R-PP have climbed modestly amidst stable demand from the downstream bottling and packaging sector for high-grade applications. The consumer inclination towards recyclable plastics for food and beverages and fluctuating input costs significantly impacted the spot price of R-PP in the domestic market. Also, the COVID shut down in China levied its impact on the inquiries for PP and proportionally weighed on the global market sentiments. However, the US recycled plastics sector has experienced a shortfall of scrap plastics, requiring material imports from other Asian and North American countries.
The Recycled Polypropylene observed mixed sentiments across the Asia-Pacific region amid uncertainties in the terminal demand. The lockdown restrictions and resurgence of Covid cases in China have created a supply-chain imbalance and substantially affected the market value of R-PP. The prices dropped at the start of the quarter amid vague domestic and foreign demand. The inventories were overflowing with enough suppliers to cater to the staggering inquiries from the regional market. However, the market gradually improved after combating the stringent Zero-Covid Policy as the supply chain showed signs of improvement and active inquiries from importing countries at the quarter-end. The prices for Recycled Polypropylene Injection Moulding, Shenzhen, were settled at USD 875/MT on a FOB basis.
In Germany, the cost of recycled polypropylene has risen significantly by 7.6% from the prices observed in the first quarter due to skyrocketing demand from the bottling and packaging sector. The recyclers across the country faced obstacles in securing enough supplies of plastic waste, strengthening the price dynamics of scrap bale feedstock. Hence, the country faced strong supply-side concerns for the feedstocks, negatively impacting the goal of the circular economy. In addition, the ongoing energy crisis due to conflicts between European nations has also imparted enough cost pressure on the production of recycled polypropylene. In June, the price of R-PP for R-PP-Natural Pellets FD Hamburg settled at USD 2400 per ton in Germany.