BIR World Mirror on Plastics - Quarterly Report May 2022
The conflict in Ukraine is creating uncertainty while rising inflation rates may trigger a recession. However, demand and prices for recycled materials remain high. The COVID outbreak in China is causing further disruption to global logistics at a time when world trade in plastics is declining.
In my previous Mirror update of mid-February, I talked about the tensions between Russia and Ukraine as well as the consequences of a possible conflict between the two countries. Those negative consequences are now becoming visible: prices for oil, gas and electricity have continued to increase and inflation is on the rise. The general expectation is that global economic growth will weaken owing to the conflict and high inflation.
The so-called terms of trade are deteriorating and consumers are losing confidence owing to the high inflation rates in Europe which, in some cases, have reached almost 12%. Companies are becoming more cautious with their investments and, if they do want to invest, they have to deal with delivery times of up to 18 months.
How these developments will affect our recycling industry remains difficult to say. As a result of the higher electricity prices, the recycling industry’s production costs have risen further and recyclers are trying to pass on these extra costs to their customers.
In addition to these increases, prices for waste have also headed higher in the past few months. Supply is fairly constant but demand for recycled material is still very high. As a result, recyclers are paying high premiums for the waste in order to cover their production needs (...) <Read more>
by Henk Alssema
VITA Plastics, The Netherlands
Chairman of the BIR Plastics Committee