Global economies are facing greater uncertainty than at any time in living memory. The repercussions of the coronavirus pandemic and the lockdowns introduced to curb it continue to be felt across the petrochemical industry globally, since demand is so closely linked to economic performance. In its unstoppable trajectory from Asia to Europe and onto the Americas, the pandemic has disrupted traditional demand trends and shifted the usual trade flows. The recycled plastics market has felt the full force of the pandemic. The market has come under pressure in the low price environment enabled by declines in upstream olefins and naphtha pricing as buyers able to switch away from recycled plastics to cheaper virgin alternatives did so. Meanwhile, shifting consumer patterns amid lockdown measures, which hurt waste collection services, have generated concern over the availability of post-consumer plastics used as the feedstock in recycled markets.
A sustained full recovery to pre-coronavirus demand and economic activity levels remains a distant target given the expected changes to consumer behavior and the slowdown in economic growth, even after countries start to resume usual business activities.
- Benjamin Brooks - Global Market Lead, Recycled Plastics