At the beginning of each year, there is a slowdown in plastic scrap production as prices increase. One of the most important reasons for this is the limited access to plastic scrap and the constantly increasing prices.
The leaders of the industry on the subject have different interpretations. It is said that the decrease in the demand for plastic scraps at the beginning of the new year, that is, in the winter months, is the natural cycle of plastic scrap. When this demand for PET is compared in summer and winter, demand differences of up to 50% can be seen. Industry representatives say that the same is true for HDPE demand, and they say that the most important reason for this is the school period in autumn, winter and spring. So we understand that the consumption of recycled HDPE is higher in summer when children are on vacation. Recycling industry members state that this reduction in production during the winter months is a normal routine for plastic recycling. However, since mid-January this year, there has been an increase in PET production demand, and officials say that they do not expect such an increase before March under normal conditions. In addition, this increase, which is out of season, has brought with it high price levels.
Demand Increase in January Surprising
In the light of these developments, the industry representatives expect that 2022 will be an active year in the plastic scrap market. This demand activity, which started in January, is mostly observed in PET plastic types. When we look at HDPE, there was no change in the price level. But there is still time. Because pipe and furniture manufacturers are starting to create demand as of March.
In response to these unexpected demand and price increases in January, an average of 30% capacity increases are realized in Europe as in North America, and even new recycling facilities are opened. Even though PET has a wider usage area, when we consider that it is used in the production of non-food packaging such as personal care and household cleaning products, HDPE recycling capacities are increased at the same rate.
According to the statements made by the officials of Apla, a European-based packaging manufacturer, the demand in Mexico and Central America is at a very high level. They offer most of the recycled plastics they produce in their facilities operating in Mexico to this regional market.
Although a higher price decrease is expected in HDPE bale prices than last year, they continue to be above the price levels before the last decreases.
An MRF operator states that LDPE film scrap is in high demand thanks to its sustainability practices. However, 2 years ago, the situation was very different. However, thanks to sustainability practices and technologies, the cleaning efficiency of this type of plastic has increased, resulting in high prices and significant demand.
Higher Prices More Collection
These developments show that the demand for recycled plastic, which increases every year, causes the prices of scrap plastic to increase. Thus, the amount of scrap increases in a healthy way. Because higher prices make more people collect scrap plastic.