[Recycled PE Weekly Review] Cost Support Remains, Market Consolidates Slightly Weakly

This week, the overall recycled PE market edged down within a narrow range, with recycled HDPE falling more than recycled LDPE. The recycled PE price index dropped by 7 points during the week, and the overall fluctuation was smaller than that of recycled PP. As of July 9, 98 transparent HDPE film scrap was priced at RMB 4,700–4,800/ton; Yuyao white-grade “Wahaha” LDPE pellets were priced at RMB 6,300–6,400/ton; and Baoding greenhouse film blue-white mixed recycled pellets were priced at RMB 6,100–6,300/ton. HDPE categories were adjusted down by RMB 50–80/ton on a weekly basis, while LDPE remained basically stable, with transactions mainly negotiated at slightly lower prices.

Cost pressures remain a strong constraint. Although spot prices of virgin LLDPE have weakened amid fluctuations, the supply of recycled agricultural film and packaging film remains tight, and bale station quotations for raw scrap stay elevated. Pelletizing enterprises face rigid raw material procurement costs, and producers show little willingness to cut prices sharply, limiting the downside room for recycled PE. As a result, costs and demand are locked in a two-way tug-of-war.

Supply and demand, as well as operations on the device side, are showing differentiation. On the supply side, the average operating rate of recycled PE granulation is 37%. Agricultural film recycling enterprises are maintaining low loads due to the scarcity of raw materials, with low-pressure inventory remaining stable and operating rates slightly higher than high-pressure. On the demand side, it is the traditional off-season for agricultural films, and the operating rates of downstream pipe and hollow products have declined slightly, with only daily chemical packaging maintaining essential procurement; overall demand growth is insufficient. This week, there are no large-scale concentrated maintenance activities for recycled PE, only sporadic short-term shutdowns of small equipment for impurity cleaning.

Transactions and market sentiment are diverging: demand for low-pressure recycled PE is seeing stable small-volume transactions driven by rigid demand, while inquiries for high-pressure material have dropped sharply. Downstream product manufacturers continue to wait on the sidelines for lower price levels, and their purchasing pace has slowed. Recycled material producers are cautious; with rising inventories of high-pressure material, sentiment is bearish. Low-pressure supply remains tight, and sellers are mostly keeping prices steady to move goods, while watching the future recovery situation of waste feedstock.

LLDPE futures fluctuated weakly, remaining under pressure throughout the week, with the main contract moving lower within the range. Weak virgin material futures weighed on overall market sentiment, and although there was a brief slight rebound midweek, it failed to boost trading volume in recycled PE, reflecting weak linkage between the futures and spot markets.

Market outlook: Tight raw material supply will provide cost support, leaving limited room for a sharp decline; however, off-season downstream demand is unlikely to improve. It is expected that recycled PE will continue to consolidate within a narrow range next week, with HDPE still having some room for a slight downward adjustment, while prices of recycled LDPE pellets are expected to remain stable. Spot transactions will still mainly be driven by just-in-time small orders.

(The data in this article is compiled from publicly available information and is for market reference only. It does not constitute any investment or trading advice.)