Concerns over the long-term impact of the coronavirus outbreak on key European recycling markets sharply escalated following the adoption of further containment measures, as reported by Mark Victory, a senior editor, at ICIS.
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ICIS: Coronavirus causing concern in European recycling markets
Sources are particularly worried about limited volumes entering collection systems, logistic disruptions, potential downstream demand losses, buyers abandoning sustainability measures, and a reduction in investment.
Concerns in Europe’s recycling industry had only been limited to the impact on virgin prices – with which recycled material competes – and individual customer relationships in countries such as Italy.
The coronavirus has had a major impact on petrochemicals too, hindering global supply chains and changing consumer demand patterns. Crude has plunged in the wake of the ongoing price war between Saudi Arabia and Russia – which is also being felt in virgin plastics markets across Europe.
Recycling markets have largely been trading normally, Victory added, albeit with some caution. Sources in the rPET market are seeing a change in consumer behaviour, particularly in buying and recycling habits.
Sources in Germany, where many consumers return PET bottles via reverse vending machines in public spaces, are waiting to assess the impact of social distancing and self-isolation on the recycling market.
The long-term impact on investment decisions also remains uncertain. Investment across mechanical and chemical recycling is vital if the industry is to meet ambitious legislative and brand targets. There is a current severe shortage of food-grade material across all recycled polymers – both on the collection and reprocessing side.
New technology, new collection methods, the growth of chemical recycling and increased reprocessing capacity are all needed to meet 2025 targets.
A global recession is looking increasingly likely, Vivctory concluded, which is likely to result in more years of underinvestment in collection, sorting and recycling innovation, but the majority of the European recycling industry continues to operate on a business as usual basis – although the consequences may be felt for many years to come.
