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January 2015 – Falling Oil Price To Significantly Affect Plastic Recycling Prices
A continued drop in the price of oil is fuelling concerns of the demand for recyclate and recovered plastic polymers.
Plastics recyclers have expressed concern over the impact of falling oil prices on demand for recovered plastics. The price of Brent Crude Oil has already fallen to its lowest level since 2009, trading at around $50.00 per barrel, down from around $106 twelve months ago. In the plastics sector, the dropping oil price is seeing the cost of virgin polymers fall, which in turn puts downward pressure on the value of recycled plastics.
Some manufacturers opt to use recycled polymers in their products due to its competitive cost compared to virgin polymers while others use it for environmental reasons. But with virgin polymer prices falling, there is less, if any, cost advantage for recycled materials. This reduced demand is affecting plastic scrap, with demand for material from households and businesses such as PET bottles and plastic films said to be low. With the full impact of the falling oil price yet to be seen, trading of recyclable plastics is forecast to be difficult for the foreseeable future.
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