[recycled pe/pp daily report] virgin material continues to weaken, recycled enterprises face rising shipment pressure

1. Today's Summary

Due to the easing of the U.S.-Iran maritime blockade, international crude oil prices have significantly declined, leading to a loosening of overall cost support in the chemical sector. Today, the prices of virgin PE and PP new materials have generally fallen in both the market and spot trades, while the price gap between new and recycled materials continues to narrow, squeezing the survival space for recycled materials. Domestic spot prices for recycled PE and PP remain stable, with no price adjustments in response to declines; however, downstream product manufacturers are showing weak inquiry activity, and recycled manufacturers are primarily relying on old orders for sales, with new orders scarce. The pressure to sell in the market continues to rise, creating a strong atmosphere of speculation overall.

2. Spot Overview

Table 1 Summary of Domestic Recycled PE/PP Prices (Unit: RMB/ton)

In terms of spot prices for recycled materials, mainstream market prices for recycled pellets remained steady, with no adjustments in increases or decreases. Recycled PE: Hebei high-pressure white transparent grade 1 granules at 6,100 yuan/ton, Juxian EVA granules at 5,400 yuan/ton, and Shandong Wahaha grade 1 granules at 5,150 yuan/ton; Recycled PP: Shandong white transparent high-quality grade 1 granules at 6,200 yuan/ton, Hebei white transparent high-quality granules at 5,750 yuan/ton, and Jiangsu white PPR crushed material at 5,100 yuan/ton. Prices for goods in various locations remained stable.

In terms of benchmark market conditions for raw materials, the prices of new materials in the market have dropped significantly today, further suppressing the upward space for recycled materials. LDPE Linyi 2426H fell by 100 yuan/ton, and LLDPE Linyi 7042 dropped by 150 yuan/ton; PP prices fell across the board, with Linyi T30S dropping by 180 yuan/ton and Tianjin PPH-T03 declining by 200 yuan/ton. The cost-effectiveness of new materials has improved, leading downstream buyers to prefer purchasing lower-priced raw materials, which diverts demand away from recycled materials.

From the perspective of market trading activity, recycling enterprises currently have no plans to actively adjust prices and mostly rely on long-term old customers to maintain order shipments, with very few scattered new orders. The price fluctuations of raw materials are stable, unable to provide a bottom support for recycled pellets. Coupled with the continuous price decline of virgin materials, traders and downstream buyers have increased their wait-and-see sentiment, resulting in overall weak actual transaction volumes in the market.

3. Market Forecast

The short-term domestic recycled PE/PP market is unlikely to see positive support, and the market continues to operate under a weak trend. On the cost side, crude oil prices have fallen sharply, leading to a continuous decline in the prices of virgin plastics, which has resulted in a narrowing price gap between new and recycled materials, further reducing the price advantage of recycled materials. On the demand side, the industry is in the off-season, with downstream product manufacturers operating below capacity, low purchasing willingness, and slow pace in acquiring necessities. Although the prices of raw materials remain relatively firm, providing slight support at the bottom for recycled materials, the overall market lacks upward driving forces. The sales pressure on recycled manufacturers is difficult to relieve, and in the short term, the recycled material market is expected to remain stable with a slight weakness, following the downward trend of virgin materials.

Editor: Abby

Source: Longzhong