Update on Plastic Market

The plastics market has been dynamic over the past 12 months but what has cause the price rises and falls?

The plastics market in the United Kingdom is not solely based on what the UK recycles and processes. There are several factors which can lead to price fluctuations.

·          Global demand

·          Oil prices

·          Construction industry

·          Processing facilities

·          Transport costs

·          Currency fluctuations

September 2015 has seen the most dramatic fall in plastic prices both on the west and east sides of the Atlantic. This covers PET, LDPE and HDPE.

With demand for recycled plastics drying up in the short term it is getting increasingly difficult for recyclers and traders in the market place.

China is one of the largest consumers and buyers of recycled plastics in the world. In recent times Chinas demand for recycled plastic has fallen. This is due to the weakening Chinese economy.

Over the past year crude oil has fallen from $89 to below $38.5. This means it is easier and more cost effective to create virgin plastics rather than recycling old plastic. This is creating a fall in demand across the world.

Since May 2015 the Pound Sterling is increasing in value both against the Yuan and the Dollar. This is good for importers however it does mean exporters have to reduce rates to stay competitive with other markets.

Sterling is currently trading at a higher rate this can be attributed to The British pound’s increase in value making British plastic a more expensive option. Economic factors play a large role here

A glut of oil at present can be attributed to embargoes being lifted from Iran and the Saudi led oil cartel is pumping record amounts. Also American shale production is flooding the market. The outlook for 2016 could see oil prices reduce further with Iran doubling its output.

The UK plastics market will fluctuate for the near future however the current climate will not last and prices will be boosted with most industries coming into peak period in quarter four this year.

The biggest question will be how quickly will the growth in China return?

 

 

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