The mood in the plastic recycling industry remains tense. Although a slight upturn in demand was an initial encouraging sign, there was still no evidence of a sustained turnaround. The situation remains challenging, particularly as demand continues to be low in most cases.
Nevertheless, recyclers were able to raise their prices slightly in some segments in February, for example for LDPE natural and nearly-natural-shade recycled pellet. However, an increase of €10-20 per tonne is not enough to make production profitable, according to one recycler. In some cases, hikes running into the triple digits would be needed to return to profitability, he said.
Against this backdrop, further insolvencies and plant closures are to be expected. The latest reported case involves the Dutch company Repeats Northern Europe. The former Daly Plastics was acquired by a consortium of investors in 2022 with the aim of "building a pan-European plastics recycling platform". Early this month, four of five LDPE recycling lines were shut down and 35 employees laid off, the business's former owner wrote on LinkedIn. The stoppages will reportedly remove around 40,000 tonnes of annual film scrap recycling capacity from the market.
The recycling industry is caught in a difficult situation: on the one hand, there is some potential for improvement due to rising substitution rates and a slight upturn in demand, while on the other, the broader economic situation remains uncertain. The deciding factor will be whether there is a rebound in demand from key consumer industries such as the construction and automotive sectors and whether political measures can strengthen the competitiveness of the recycling industry.
Recyclers are also anxiously waiting to see if the German parliament will authorise a €500bn special fund for infrastructure spending over the next ten years. An investment package like this could boost the construction industry, which has been weak for some time, and increase demand for recycled plastics.
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