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Insight | Time: Jan 8 2020 3:43PM
Challenges on recycling market continue in 2020
 
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According to CCFGroup Index, the prices of flakes for HC re-PSF were averaged at 6,084yuan/mt in 2019, down 11.86% from 2018, that of HC re-PSF in Zhejiang averaged at 8,445yuan/mt, down 11.54%, that of conventional close virgin PSF averaged at 7,122yuan/mt, down 14.22%. Black re-PFY yearly average price scored at 7,874yuan/mt, down 13.33% from 2018.

1. The challenges will continue in 2020
Recycled chemical fiber plants experienced periodical feedstock shortage, overseas capacity expansion, market shares squeezed by virgin polyester and environmental protection regulation in 2019. Frequent production curtailment and suspension was seen and demand was sluggish.

In 2020, it is still an intensive capacity expansion year of PTA and MEG units. Virgin PSF plants will focus on HC virgin PSF. It is roughly forecast that production of HC re-PSF may shrink by 25.8% in 2020 compared with its good year of 2017, while HC virgin PSF production may rise by 134.9%. If there is no obvious policy support, virgin polyester fibers will continue to seize the shares of recycled chemical fibers.

2020 is also the last year of the 13th Five-Year Plan, and China has become more prominent on recycling, such as the new fashion of garbage classification in various cities, recycled carpets and degradable balloons on Tiananmen during National Day, and the plastic ban released by local governments and brands. It is hoped that in the 14th Five-Year Plan, recycling will continue to be the key goal to achieve, and more support will be given to regeneration.

2. Urgent and important to support recycling
(1) Microplastics are everywhere and the situation is grim.
(2) European and American countries: recycling is difficult and expensive. Renewable and degradable direction is still the international theme in the future.
(3) China’s recycled enterprises face more difficult situation with the lower virgin polyester feedstock.
(4) The good quality of high-end recycled products is visible. At present, many China’s recycling companies have been approved by the GRS certification, and have won recognition in the spinning and colored fiber fields. However, high-end re-PFY is still in the development process. Among them, there is still a long way to go to trace back to the source regeneration and require end consumers to recognize. Governments, institutions, enterprises and individuals need to strengthen and support the concept of renewable environmental protection.
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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