Polyvinyl chloride (PVC)

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 27 December. OUTLOOK ’25: US phenol/acetone production to remain curtailed on soft demandUS phenol demand will likely remain soft and weigh on acetone supply in H1 2025 as expectations for a rebound are tempered. OUTLOOK '25: US PVC faces oversupply, export challengesThe US polyvinyl chloride (PVC) market is set to face significant headwinds in 2025, entering the year with abundant inventories, expanded production capacity and constrained export opportunities. OUTLOOK ’25: US chem tanker market growth to support favorable rates; container market readies for port labor issues, tariffsGrowth in the US liquid chemical tanker market is likely to support favorable rates in 2025, while the container shipping market could see upward pressure from possible labor strife at US Gulf and East Coast ports and proposed tariffs on Chinese imports. OUTLOOK ’25: LatAm chemicals pessimism persists as downturn could last to 2030For many players within Latin America petrochemicals, 2025 will only be one more stop on the long downturn journey as, for many, the market’s rebalancing will only take place towards the end of the decade.

30-Dec-2024

HOUSTON (ICIS)–With the 15 January target date for a new master agreement between union dock workers and US Gulf and East Coast ports rapidly approaching, the Alliance for Chemical Distribution (ACD) is urging both sides to push back the deadline. Negotiations between the dockworkers, represented by the International Longshoremen’s Association (ILA), and the ports, represented by the United States Maritime Alliance (USMX), have been stalled as each side is unwilling to budge on issues surrounding automation of ports. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. ACD President and CEO Eric Byer outlined the challenges hindering negotiations and emphasized the significant economic and public consequences of a contract lapse in a letter to both parties. Byer also highlighted the economic impacts the previous three-day strike caused to various industries and the challenges the chemical distribution industry would face if another strike were to occur. Other challenges are the 29 January start of the Lunar New Year, and the upcoming inauguration and transition to the new presidential administration. “In early October, during the three-day lapse in the master contract between the ILA and USMX, there was a substantial economic impact, weeks of supply chain disruptions, and challenges in getting necessary supplies to communities in the wake of the Hurricane Helene disaster,” Byer said in the letter. “Additionally, had the lapse continued for just a few more days, it would have resulted in ACD members losing stock of chemicals used for critical processes, such as water treatment.” In a 12 December post on social media, President-elect Donald Trump expressed his support for the dockworkers in the labor dispute. A strike would not have an impact on liquid chemical tankers, which transport most chems. For most traders and brokers who export polyvinyl chloride (PVC), much of their warehouse space is full and they are unable to book vessels until after the 15 January deadline because of the uncertainty. “This could make for a very challenging first quarter,” ICIS Senior Analyst Kelly Coutu said.

19-Dec-2024

HOUSTON (ICIS)–Planning to build their first US plant in Kentucky, Swedish producer Cinis Fertilizer announced it has been approved for tax incentives. The company said it is currently planning the construction of the company’s next production facility in Hopkinsville, Kentucky and has applied for both grants and tax incentives, nationally and locally. The Kentucky Economic Development Finance Authority (KEDFA) has preliminary approved a 15-year incentive agreement with Cinis Fertilizer under the Kentucky Business Investment program. For final approval and to receive the tax credits of up to $1.5 million, the company must invest about $109 million and meet annual targets such as creating 65 full-time jobs in Kentucky over 15 years and paying an average hourly wage of $38, including benefits. Additionally, KEDFA approved Cinis Fertilizer for up to $250,000 in tax incentives through the Kentucky Enterprise Initiative Act (KEIA). KEIA allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing. “We are grateful for the warm welcome we have received in Kentucky and look forward to contributing to the future of Hopkinsville,” said Jakob Liedberg, Cinis Fertilizer CEO. “Being granted these tax incentives is a great start and in parallel we are working on securing grants, where the processes and timelines are longer.” First announced in 2023, this will be the producer’s their third plant with the two other plants located in Sweden. The company has already signed a 10-year agreement with Ascend Elements, a leading American manufacturer of engineered battery materials, regarding the sourcing of sodium sulphate, and have arranged with potash producer K+S Minerals to purchase potassium chloride. This plant is scheduled to start in 2026, with it planned to have a capacity of up to 300,000 tonnes of potassium sulphate yearly.

13-Dec-2024

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: As delegates gather for this year’s Gulf Petrochemicals and Chemicals Association (GPCA) in Oman, front-of-mind will, of course, be the global trading environment. Is the world willing or able to continue to absorb China’s manufacturing surpluses, including in chemicals and polymers as today’s post discusses? The ICIS data suggest there is nothing new in China dominating global capacities in polymers such as polyester fibres and PVC (although as China moves up the chemicals value chains, its dominance of EVA  and polycarbonate is new). But historic context is everything. In 2001-2021, trade tensions between the rest of the world and China were not where they are today. The world felt more able to accommodate China’s dominance of chemicals and other manufacturing value chains. We, of course, need to consider the implications of Donald Trump’s election victory and the EU’s growing concern over what it sees as Chinese overcapacity. A 29 November South China Morning Post article wrote as follows: The EU’s civil service [last week] flew officials and experts in, at von der Leyen’s personal invitation, from around Europe and the United States for a full day devoted to Chinese overcapacity – an issue former trade chief Valdis Dombrovskis described as a “significant threat”. “From steel and solar panels to shipbuilding and the automotive industry – this is not an abstract challenge, it is reality. And for many businesses, both in Europe and within our partners, it is an existential challenge,” Dombrovskis said. You can talk as much as you like about cost-per-tonne economics and about feedstock advantage, but it won’t get you very far in this post-Chemicals Supercycle world. Today’s blog is another example of why we need to broaden our analysis out to include a wide range of big picture factors that will shape the global chemicals industry. In this case, you need to build a matrix of countries, companies and chemicals products and then determine scenarios for the effect on all three of a much more uncertain global trading environment. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

02-Dec-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 22 November. NEWS APLA '24: LatAm chems should prepare for rebalancing to take place only from 2030 onwards – APLALatin American chemicals producers should be prepared to face a prolonged downturn which could extend to 2030 as newer capacities globally keep coming online, according to the director general at the Latin American Petrochemical and Chemical Association (APLA). APLA '24: Mexico's Cancun to host APLA 2025Next year's annual summit of the Latin American Petrochemical and Chemical Association (APLA) will take place in Cancun, Mexico, the organizers confirmed on Thursday. APLA '24: Moeve to advance sustainable detergent materials – execMoeve Chemicals, previously known as Cepsa Chemicals, is pushing forward with sustainable innovations in the detergent industry, particularly through its linear alkyl benzene (LAB) business, according to an executive at the producer. APLA ’24: Anastacio sees Mexico as next major market to gain market share – CEOBrazil-based chemical distributor Quimica Anastacio is making a major push into Mexico, adding to its strong presence in Brazil and Argentina, its CEO said. APLA '24: Women face persistent workplace and travel safety challenges – chems execsA discussion among industry leaders has highlighted ongoing challenges women face in workplace equality and business travel safety, with experts warning that salary parity remains decades away. APLA '24: Latin America poised for strategic growth amid global shifts – economistLatin America stands at a crucial turning point as global economic and political dynamics shift, with significant opportunities in energy, food security and technological advancement, an economist said on Tuesday. APLA ’24: Vaca Muerta to double Argentina oil and gas production by 2030, allow for new chem projects – YPFGrowing production in Argentina’s Vaca Muerta shale formation should double oil and gas volumes in the country by 2030, enough for new petrochemicals projects, as rising production in Vaca Muerta more than offsets declines in conventional production, an executive at energy producer YPF said. APLA ’24: Brenntag aims to expand footprint in Brazil and Mexico via M&A, organic growth – execGermany-based chemical distributor Brenntag will focus on expanding its business in Brazil and Mexico in particular in Latin America through acquisitions and organic growth, said the head of its Latin American industrial chemicals business. APLA '24: Colombia’s plastics grapple with new regulations, Chinese competition – Grupo AlmatiaThe Colombian plastics industry faces significant challenges as it navigates new environmental regulations and increasing competition from Chinese imports, the CEO at plastics distributor Grupo Almatia said. APLA ’24: Logistics more challenging to plan with increasing external threats – panel Logistics are getting even more challenging, as climate change, armed conflicts and tariffs are making planning difficult, shipping experts said on a panel discussion at the Latin American Petrochemical and Chemical Association (APLA) Annual Meeting. APLA '24: LatAm petchem woes remain, some help to come from nascent protectionist eraLatin American petrochemicals profitability, even the survival of some domestic producers, will hardly come from oversupplied markets facing poor demand but governments’ helping hand with protectionist measures. Unigel seeks US court recognition of Brazilian reorganization planUnigel filed a court proceeding that seeks US recognition of its reorganization plans, which had been approved in Brazil, the Brazilian styrenics and acrylics producer said on Friday. PRICINGAPLA '24: LatAm PP international prices fall in Chile, Peru on competitive Asian offersInternational polypropylene (PP) prices dropped in Chile and Peru due to competitive Asian offers. Prices remained unchanged this week in other Latin American (LatAm) countries. APLA '24: Most LatAm PE domestic, international prices steady to lower on weak demand, cheaper importsMost domestic and international polyethylene (PE) prices were assessed as steady to lower across Latin American countries this week on the back of weak demand and competitive offers from abroad. APLA '24: Brazil’s caustic soda supply strains; PVC market sees increased competitionIn Brazil’s caustic soda market, a combination of planned and unplanned maintenance events in Q4 2024 has intensified supply constraints, exerting potential pressure on prices. APLA '24: Latin America’s PE, PP demand expected weak to year-end, 2025Persistent poor demand for polyethylene (PE) and polypropylene (PP) across Latin American economies is expected to stay for the remaining of the year and into 2025, with no improvement signs on the horizon.

25-Nov-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 15 November. INSIGHT: India’s ADD findings on PVC have potential to reshape regional flows in wider Asia By Jonathan Chou 11-Nov-24 11:00 SINGAPORE (ICIS)–Asia's polyvinyl chloride (PVC) market players are assessing the potential ramifications following preliminary findings on India's PVC imports released by the country's Directorate General of Trade Remedies (DGTR). Asia petrochemical shares tumble as China stimulus disappoints By Jonathan Yee 11-Nov-24 15:04 SINGAPORE (ICIS)–Shares of petrochemical companies in Asia tumbled on Monday as China’s much-awaited stimulus measures failed to impress markets, while the US is likely to put up more trade barriers against the Asian giant following the re-election of Donald Trump as president. Asia toluene markets slump on waning regional demand By Melanie Wee 12-Nov-24 11:47 SINGAPORE (ICIS)–Asia’s toluene spot markets are being weighed down by a combination of burgeoning supply and lacklustre demand, at a time when arbitrage economics to divert material to the US were unviable. Asia petrochemical shares fall on strong US dollar, uncertain trade policies By Nurluqman Suratman 13-Nov-24 14:07 SINGAPORE (ICIS)–Shares of petrochemical companies in Asia extended losses on Wednesday, tracking weakness in regional bourses, amid a strong US dollar and uncertainty over trade policies of US President-elect Donald Trump which could fuel inflation. Shell Singapore site divestment deal to be completed in Q1 2025 By Nurluqman Suratman 14-Nov-24 11:41 SINGAPORE (ICIS)–Shell expects the deal to sell its energy and chemicals park in Singapore to Chandra Asri and Glencore will be completed by the first quarter of 2025, a company spokesperson said on Thursday. INSIGHT: China may accelerate PP exports amid intensified supply and demand imbalance By Lucy Shuai 14-Nov-24 13:00 SINGAPORE (ICIS)–China may accelerate PP exports in 2025 amid an intensified imbalance between supply and demand as a large number of new plants are expected to start up. PODCAST: SE Asia propylene to face additional supply, freight challenges in 2025 By Damini Dabholkar 15-Nov-24 11:28 SINGAPORE (ICIS)–Southeast Asia's propylene market faces significant challenges in 2025, with additional supply expected and freight rates continuing to impact downstream demand. Crimped supplies ease pressure on Asia VAM prices By Hwee Hwee Tan 15-Nov-24 14:36 SINGAPORE (ICIS)–Sporadic plant disruptions and crimped supplies in China are fuelling expectations of price competition easing across vinyl acetate monomer (VAM) import markets in Asia.

18-Nov-2024

SAO PAULO (ICIS)–Brazil is to start an investigation into polyethylene (PE) arriving on its shores from the US and Canada and whether the material constituted dumping, the government said. As previously reported by ICIS, the proposals to investigate came from polymers major Braskem and were backed by Brazil’s chemicals trade group representing producers, Abiquim. Braskem is the dominant PE producers in Brazil, and antidumping duties (ADDS) on US- and Canada-originated PE would considerably prop up its domestic market position. The start of investigation proceedings was published in Brazil’s Diario Oficial da Uniao (Official Gazette). The investigation is to be carried out by the Department of Commercial Defense (Decom), which is part of the Ministry of Industry’s Secretary of Foreign Trade. Braskem filed on July 31 a petition to initiate an investigation into the practice of dumping of PE resins exports to Brazil with US or Canadian origin. The analysis of the evidence of dumping is to consider the period from April 1, 2023 to March 31, 2024, while the period for analyzing potential damage caused to domestic producers is to consider the period from April 1, 2019 to March 31, 2024. “Due to the large number of producers/exporters from the US and Canada identified in the detailed data on Brazilian imports … the producers or exporters responsible for the largest reasonably investigable percentage of the export volume of the exporting country will be selected to send the questionnaire,” said Decom. “The absolute dumping margins determined for the purposes of this document reached $220.95/tonne and $264.99/tonne, and the relative margins were 21.4% and 26.9% for the US and Canada, respectively. It can be inferred that, if such dumping margins did not exist, domestic industry prices could have reached higher levels, reducing or even eliminating the effects of the investigated imports.” Braskem said earlier in November it is lobbying the Brazilian government to extend ADDs on polyvinyl chloride (PVC) beyond 2025 when they are due to expire. In October, the government implemented higher import tariffs on several chemicals, also after heavy pressure by domestic producers and their trade group Abiquim. Additional reporting by Bruno Menini

14-Nov-2024

HOUSTON (ICIS)–Under US President Donald Trump, US chemical companies will unlikely see the full-blown tariffs that he has proposed during his campaign, but they will operate under a faster growing economy with higher inflation and interest rates that will settle at an elevated rate, economists at Oxford Economics said on Monday. Oxford is forecasting what it calls a limited Trump scenario, under which his administration will not fully adopt the policies he proposed during his campaign. Tariffs will be limited, targeted and phased in, while Congress will limit growth in the government deficit by restraining some of his tax cuts and spending measures. Oxford's baseline scenario for 2025 does not change much because it is assuming that Trump will focus most of his first year in office on extending the tax cuts of his earlier administration, said Ryan Sweet, chief US economist for Oxford Economics. He made his comments during a presentation. The consultancy's forecast for 2025 GDP is a tenth of a point higher versus its estimate in October, he said. Inflation will rise by a tenth of a point in 2025. Trump is inheriting a strong economy, so there is little risk of recession. In these initial years, the biggest effect on the US economy will be tax cuts, and these should increase growth in GDP, said Bernard Yaros, lead US economist for Oxford. After 2026, Oxford assumes Trump will adopt some of his immigration restrictions, and it is expecting GDP growth to fall below its earlier forecast. Stricter immigration policies will reduce the supply of labor and slow down the consumption of goods and services. LIMITED TARIFFSOxford expects the Trump administration will not impose the widespread tariffs it proposed during its campaign, which included 60% duties on Chinese imports and baseline tariffs of 10-20% on all imports. Yaros said these campaign proposals were likely negotiating tactics. Sweet expects that Trump will require Congress to pass some of his tariffs, and legislators will not pass such high rates, Sweet said. In other cases, advisors and trade representatives will restrain Trump. For China, Trump will likely impose tariffs of 25% on major categories, such as machinery, electronics and chemicals, Yaros said. For the EU, Canada and Mexico, Trump will likely impose very targeted tariffs on steel, aluminum, base metals and motor vehicles, Yaros said. For Canada and Mexico in particular, Trump will unlikely adopt measures that will threaten the United States-Mexico-Canada Agreement (USMCA), the trade agreement that his administration signed during his first term. That trade deal was one of the signature achievements of Trump's administration, so he will not want to pursue policies that will threaten the upcoming renewal of that agreement, Yaros said. While the tariffs will be limited, they will still be a drag on the economy by nudging inflation higher, reducing real consumer income, tempering consumer spending and encouraging the misallocation of resources, Yaros said. LIMITED TARIFFS REDUCE RETALIATION RISK FOR CHEMSOxford's scenario will limit the risk of countries imposing retaliatory tariffs on US exports. US chemical producers were vulnerable to such tariffs because they purposely added capacity for export over the years, particularly for polyethylene (PE) and polyvinyl chloride (PVC). The magnitude of these exports and the existence of a global glut in plastics and chemicals would make US chemical exports a likely target for retaliatory tariffs. On the import side, the US does have deficits in key commodity chemicals, such as benzene. Targeted tariffs could carve out exceptions for benzene was well as other chemicals in which the US has a trade deficit, such as methyl ethyl ketone (MEK) and melamine. Targeted tariffs will likely rule out duties on imports of oil. US refineries rely on imports of heavier grades of oil to optimize the operations of some of their units. US shale oil makes up nearly all of the growth in the nation's crude production, and that oil is made up of light grades. Meanwhile, tariffs could shield some chemicals from competition, such as epoxy resins. CONGRESS MAY LIMIT GROWTH IN DEFICITOxford pointed out that some moderate Republicans could restrain some of Trump's tax and spending proposals to limit growth in the government deficit, Yaros said. Other economists have expressed concerns that the US will issue larger amounts of government debt to fund the growing deficit. That would lead to a cascade effect that could ultimately increase rates for US mortgages, which would slow down the housing market and the plastics and chemicals connected to that market. Still, all of Oxford's scenarios forecast a rise in the government deficit. SLOWER RATE CUTS BY FEDOxford expects Trump's policies will be inflationary, which will prompt the Federal Reserve to slow down the pace of cuts on their benchmark federal funds rate. It expects the federal funds rate will settle at 3.125%, versus its forecast of 2.75% that was made in October. TRUMP WILL PRESERVE MOST RENEWABLE TAX CREDITSTrump will likely preserve most of the tax credits in the Inflation Reduction Act (IRA) because most of them benefitted states controlled by his party, the Republicans, Yaros said. These include tax credits on renewable fuels, renewable power, hydrogen and carbon capture. The exception will include incentives for electric vehicles (EV), which Trump had singled out during his campaign, Yaros said. OXFORD'S FORECASTThe following chart shows Oxford's new baseline forecast and compares it with a scenario under which the policies of the previous administration are maintained. The following chart shows Oxford's forecast that assumes Trump will fully adopt all of his campaign proposals. This is not the consultancy's baseline forecast because it does not expect such a full-blown Trump scenario will happen. Thumbnail shows the US Capitol. Image by  photo by Lucky-photographer.

11-Nov-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 8 November. Braskem’s US sales could benefit from higher tariffs on automotive – CFOBraskem’s operations in the US could benefit if president-elect Donald Trump hikes import tariffs related to the automotive sector, the CFO at the Brazilian polymers major said this week. Brazil's Braskem lobbying for ADDs on Chinese PVC to be extended – CFOBraskem is lobbying the Brazilian government to extend antidumping duties (ADDs) on China-produced polyvinyl chloride (PVC), the CFO at the Brazilian polymers major said on Thursday. INSIGHT: Braskem’s tariffs-infused optimism risks turning into complacencyManagement at Brazil’s polymers major Braskem sounded on Thursday the most optimistic in many quarters after the Brazilian government – which indirectly has a stake on the company – sharply increased import tariffs to protect, in large part, Braskem’s market share. Mexico’s Braskem Idesa completes 87% of ethane terminalConstruction of Braskem Idesa’s ethane import terminal in Mexico had reached around 87% of physical completion as of September, the Brazilian petrochemicals major said during its Q3 earnings release and conference call on Thursday. Brazil central bank hikes rates 50 bps to 11.25%, seeks ‘credible’ fiscal policyBrazil's central bank monetary policy committee (Copom) voted unanimously late on Wednesday to hike the main interest rate benchmark, the Selic, by 50 basis points to 11.25%, to fend off rising inflation and a depreciating Brazilian real. Chile’s manufacturing output falls in September, overall activity flatChile’s manufacturing output fell in September by 1.1%, month on month, the central bank’s monthly report about economic activity said this week. Brazilian police indict 20 in Braskem mining disaster caseBrazil's Federal Police (PF) have closed their probe into Braskem's rock salt mining operations in Maceió, state of Alagoas, naming 20 individuals as suspects. MOVES: Braskem appoints Roberto Ramos as CEOBraskem is to appoint Roberto Ramos CEO, effective 1 December, the Brazilian petrochemicals major said on Monday. PRICINGLatAm PE international prices stable to soft on competitive US exportsInternational polyethylene (PE) prices were assessed as stable to soft across Latin American (LatAm) countries on the back of competitive US export offers. LatAm PP domestic prices fall in Chile, Colombia, Mexico tracking lower feedstock costs, weak demandDomestic polypropylene (PP) prices fell in Chile, Colombia and Mexico, tracking lower feedstock costs and weak demand. In other Latin American (LatAm) countries, prices were unchanged this week.

11-Nov-2024

HOUSTON (ICIS)–Recently released data from the US International Trade Commission shows imports of polyethylene terephthalate (PET) scrap have reached record highs, following a slight dip the previous quarter. This is in spite of recent efforts from the US Customs and Border Patrol (CBP) to shift imports of recycled polyethylene terephthalate (R-PET) flake material away from the plastic scrap harmonized schedule (HS) code and towards the PET HS code. Imports and exports of other types of plastic scrap remain relatively steady quarter on quarter (QoQ), though Canada and Mexico continue to fade as trade partners for plastic scrap. US remains a net importer of plastic scrap, largely on PET scrap imports PET scrap imported into US increased 22% QoQ YTD PET scrap exports to Mexico surpass 2023 volumes IMPORTS SURGE, LARGELY DRIVEN BY PETQ3 2024 trade data from the US Census Bureau shows US imports of plastic scrap – noted by the HS code 3915 – have increased 12% QoQ quarter on quarter, and 11% year on year when comparing with Q3 2023. Plastic scrap imports include items such as used bottles, but also other forms of recycled feedstock such as purge, leftover pairings and also flake material. Imports totalled 129,137 tonnes in Q3, with PET making up 54% of that volume at 70,094 tonnes. This is the highest volume of PET scrap ever imported in a single quarter. Year to date (YTD) volume at 191,738 tonnes remains just shy of the 2023 total amount, 204,278. Demand for R-PET flake was solid throughout Q3, especially as ocean freight rates began to normalize from late spring highs. Moreover, the Q3 typically is the peak in bottled beverage demand, the largest end market for US R-PET resin. At this same time, market players noted that domestic PET bottle bale feedstocks were surprisingly limited in availability, adding to the increased interest in supplementary imported flake feedstocks for recyclers. Though this data could be impacted in the near future due to recent efforts from US Customs who have directed several market players to use the virgin PET HS code, 3907, when importing flake. Market players have traditionally used the plastic scrap code as it is a duty free item, whereas the PET code carries a 6.5% duty, unless the country of origin has a free trade agreement with the US. The top countries who have sent PET scrap to the US include Canada, Thailand and Japan, respectively. While Canada makes up 24% of PET scrap imports alone, of the top 10 origin countries, those based in Asia make up 44% of all PET scrap import volumes, followed by those in the Latin American region at 15%. Market participants confirm they have seen a notable rise in imported R-PET activity from Asia and Latin America, particularly due to their cost-competitive position when it comes to feedstock, labor and facility costs related to R-PET. As more imports from Asian and Latin American countries continue to increase, Canada and Mexico could both see a reversal of their previous growth trend on total scrap exports to the US. Imports of all other subcategories of plastic scrap, including polyethylene (PE), polystyrene (PS), and polyvinylchloride (PVC) were relatively steady. PE scrap imports made up 12% of Q3 plastic scrap imports, driven by shipments from Canada at 68% of the YTD volume, followed by Mexico at 17% of the YTD volume. Germany surprisingly has increased PE scrap exports to the US fourfold, though the total volume remains small, at 1,210 tonnes YTD. YTD, the US remains a net importer of plastic scrap. MEXICO REMAINS KEY BUYER OF US PET BALES Though exports of PET scrap, largely in the form of bales, fell QoQ tonnes, YTD volumes have already surpassed that of 2023. Mexico in particular continues to be a key end market for US bale material, making up 59% of the 18,362 tonnes of PET scrap exports. While the US has always exported a portion of domestic PET bale material to other countries, exports to Mexico have surged over the last year. This growing trade relationship is largely attributed to new capacity in Mexico, paired with strong local demand which has elevated local bale prices. As a result, Mexican recyclers have been purchasing US PET bales as a lower cost option with higher availability. YTD exports of PET scrap to Mexico are already 3,333 tonnes above 2023 total PET scrap volumes. Exports of US bales to Mexico, particularly from the Southern areas of the US such as Texas and parts of California, continue to challenge domestic recyclers, who struggle to secure adequate volumes of bale feedstock. Furthermore, as export demand continues put upwards pressure on bale pricing, local recyclers find themselves stuck between rising feedstock costs and very competitive import virgin and recycled pricing, thus unable to pass along those increased costs. PET scrap exports to Malaysia have also surpassed 2023 volumes, at present by over 2,400 tonnes. On the other hand, volumes to Germany are now 2,966 tonnes short of 2023, showing the shift from European demand to Asian and Mexican demand. Overall, exports of other types of plastic scrap continue to slow, following the Chinese National Sword and Basel Convention adoption several years ago. Total plastic scrap exports down QoQ but similar to levels seen this time last year. Canada and Mexico receive 56% of US plastic scrap exports, followed by several Asian countries including Malaysia, India, Vietnam and Indonesia which in total 28% of exports. PE continues to be a leading polymer type for US plastic scrap exports, coming in at 32,519 tonnes this quarter, roughly 32%. Insight by Emily Friedman

11-Nov-2024