Plastic recyclers report that business with regrind and regranulate was again just ticking over, with sales volumes in Germany remaining at a low level in October. Demand is simply not recovering and primary plastics are still too cheap, according to respondents. Margins are weak and players are often bleeding red ink, EUWID was told. For the time being, price hikes are inconceivable. Recyclers are therefore trying to trim their purchase prices for waste and production scrap even more.
The weak demand is being seen in all customer sectors, including construction, automotive, electronics and food packaging. Many companies are struggling with the combination of high inflation and rising costs for personnel, energy and materials, alongside sluggish demand. Consequently, there has been a considerable uptick in insolvencies and short-time work.
After the Fakuma plastics trade fair in October, recyclers say they are getting more inquiries about projects using recyclate. But it will be some time before until such plans start to materialise in actual sales volumes, says one market participant. Demand is basically non-existent at the moment, according to one major recycler. Without toll processing contracts, there would be barely any sales, he adds. Market players declared the rest of this year a "write-off” some time ago and are now hoping for the situation to improve next year.
Owing to the slump in sales, some recyclers reduced their purchase prices in October for many grades of post-industrial plastic scrap and regrind. Prices for LDPE commercial film scrap were still relatively stable, which was attributed to export sales to Asia. However, it appears the tide started turning in this market in late October because the Asian buyers were getting less money for their recycled pellet. European recyclers are therefore hoping purchase prices will slide, which would help bolster their weak margins.
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