David Eldridge
Prices for plastics scrap material have plummeted in recent months, but industry executives say the downturn should not be allowed to jeopardise the success shown in UK plastics recycling growth.
The plastics recycling industry and supply chain needs to keep a steady nerve, according to Chris Dow, md of Closed Loop Recycling. Speaking to PRW, he criticised national newspaper reports suggesting that local councils are having problems due to lower prices and claiming some councils are cutting back their collection of plastics bottles and other waste.
The situation is that there are lower prices but we can still sell our products said Dow.
The company opened its first plant producing rPET flake and rHDPE pellets in Dagenham, east London, earlier this year and is aiming to be at full throughput capacity of 5 tonnes per hour by January. It has now taken a short-term lease on neighbouring land to store more bales of waste PET and HDPE bottles.
Dow said that Closed Loop is not making capital out of the downturn and is paying a fair market price for its raw material.
Our goal is to support councils who are supporting recycling and to work on long-term relationships, he said. This market situation won’t go on forever.
The price fall has not deterred Closed Loop from moving ahead with its second project, a similar plant to produce food grade rPET and rHDPE at a site in Deeside, North Wales (PRW 19 September 2008). Dow said the company’s board of directors have shown no hesitation in continuing with the second plant, and orders for equipment with long lead-times are being placed. Around 70% of the Welsh projects proposed 50,000tpa output has been contractually sold, he added.
Wrap plastics sector manager, Paul Davidson, said there had been some misreporting in the national press and no council has stopped collecting used plastic bottles. He acknowledged there is an uncertainty in the plastics scrap market at the moment, but believes this will pass.
A fall in demand in China – previously a powerhouse in driving collection of scrap for export in western countries – has played a major part in the sudden downturn in global plastics scrap prices (PRW 28 November).
Davidson said it is difficult to have a definitive view of what is happening in Chinese demand, but things are likely to become clearer in the next two months. Scrap markets often slacken in the run-up to the Chinese New Year in late January, but, in contrast to now, they were tight in the last two years and prices were unusually strong.
Wrap last week launched an online market knowledge portal and advice forum to help local authorities understand the market downturn.
Liz Goodwin, Wrap’s CEO, said in a release: “Many local authorities have told us that they are continuing to find markets for recovered materials, particularly high quality materials such as plastic bottles and glass. The vast majority of materials that are being put out for recycling are still being recycled.