Narrow price difference between new and used materials The recycled PE market is under pressure

Nov 28, 2022

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The new and old PE materials are substitutes for each other, and there is a certain price difference between them. Since the middle of October, the price difference between new and used materials has been at a narrow level, which is bad for the recycling market. The shipment of high-end recycled materials was blocked, and some prices fell under pressure.

Since the middle of October, the price difference between new and used PE materials has dropped below 1000 yuan/ton, and has remained at a narrow level, which is bad for the renewable market. Affected by this, manufacturers of downstream products have low acceptance of high priced recycled materials and are cautious in trading. Regenerative manufacturers mainly trade medium and low-end materials, and the shipment of high-end materials is blocked.

Weak operation of new material price

Recently, the price of domestic polyethylene market fluctuates in a narrow range. The price of upstream crude oil fluctuated greatly, and American crude oil fell below the important support of USD 80/barrel, which to some extent dampened the atmosphere of polyethylene market. The 2PE unit of Shanghai Petrochemical Company and No. 1 high-pressure unit of Maoming Petrochemical Company were newly added for shutdown and maintenance within the week, but the impact on domestic supply was relatively limited. In terms of imports, the offer of low-cost imported LDPE goods increased significantly, driving the focus of domestic LDPE goods down. There was no significant change in the demand side this week, and the factory’s intention to receive goods was still weak. On the whole, the polyethylene market in the week continued the previous shock trend, and the price change of most varieties was limited. At present, the linear mainstream price is 8050-8650 yuan/ton, with most of them falling slightly, ranging from 10-130 yuan/ton; The price of high-pressure mainstream is 8950-9450 yuan/ton, with a drop of 100-300 yuan/ton; The price of most varieties of low pressure has weakened, with the range of change ranging from 20 to 100 yuan/ton.

Narrow price difference between new and used materials

As a substitute product, PE has a certain price difference between the prices of recycled PE and new materials. If the price difference is narrow, the new material will obviously suppress the price of recycled PE, and the price of recycled PE will have a great downward pressure. On the contrary, there is room for the price of recycled PE to rise. However, the price linkage of new and used materials has a certain time lag. In recent years, the reasonable range of the price difference between new and old materials is 1000-1500 yuan/ton, the price difference is too large or narrow, and the linkage between new and old materials is strong.

Since the middle of October, the average price difference between new and old materials has been 866 yuan/ton, which is at a narrow level. Affected by this, downstream product manufacturers have low acceptance of high priced recycled materials and are cautious in taking the goods. The shipment of recycled materials, especially high-end materials, is blocked and the price is under pressure.