ABU DHABI (Scrap Monster): According to participants of the Plastics Committee meeting at the 2015 BIR Convention held in Dubai, UAE, the plastic recycling sector has immense potential to grow at rapid rate. However, the sector is not free from challenges, it noted.
The rate of plastic recycling has grown worldwide. However, tons of plastic waste still ends in landfills and incinerators.
As per Surendra Borad, Chairman, Plastics Committee, the fall in oil prices have helped to lower the price levels of primary plastics and plastic scraps. The plastic prices moved in tandem with oil prices, especially when oil prices had plunged during late-2014 and early-2015. However, the correlation between oil and plastic scrap prices failed to hold up thereafter. For example, LDPE scrap prices in Europe failed to drop even as oil prices hit the bottom of $45 per barrel during March this year. On the contrary, the LDPE scrap prices increased to €560 per ton.
The supply of plastic scrap for export has dried up in the European region. Increased quantities of plastic scrap material are being reprocessed domestically. This has led to less material available for export. The shortage of plastic scrap for export is likely to keep plastic scrap prices at the current level.
The European plastic scrap market performance during the second half of 2015 is heavily dependent on Chinese economic condition. The China customs in co-ordination with environment ministry is planning to implement new environmental assessment procedure, as part of extension of Green Fence regulations. The new rules which will be applicable for all inbound plastic scrap shipments are expected to come effective during H2 2015. Meantime, Chinese plastic scrap demand continues to remain strong. The demand for HDPE and LDPE plastic scrap from agricultural film sector is expected to peak during the second half of the year.
Focusing on GCC countries, the Convention noted that plastic scrap collection in many countries is only at their initial levels. However, the region has recently witnessed huge investments in plastics production.