RECYCLED PLASTICS MARKET UNDER PRESSURE: OVERSUPPLY AND SLUGGISH DEMAND KEEP PRICES FROM RECOVERING

 

The recycled resin market is facing significant pressure on both prices and demand during 2025–2026, driven by a combination of oversupply and weakening consumption. According to Ms. Andrea Bassetti, Analyst at ICIS, as the market moves toward the end of the year, demand for recycled resins has yet to show a clear recovery.

 

Brand owners and manufacturers remain highly cost-conscious and continue to delay purchasing recycled materials in order to control expenses. This cautious buying behavior is occurring amid highly competitive price negotiations for 2026 contracts, placing additional financial strain on recyclers.

 

In the recycled PET (rPET) segment, both bale and flake markets have shown some signs of stabilization, with prices edging slightly higher following the inventory overhang seen during the summer months. However, overall demand remains muted, and the limited recovery observed has been driven more by supply adjustments than by genuine purchasing activity from end users.

 

For recycled polyethylene (rPE), prices for certain grades such as natural HDPE bales have recorded modest increases. In contrast, more price-sensitive grades, including mixed-color HDPE and LDPE, have remained largely flat and continue to struggle to compete with low-priced virgin resin. As a result, recyclers are facing sustained pressure from customers who are closely managing input costs.

 

Furthermore, recycled LDPE prices continue to reflect the market’s fragility, underscored by the shutdown of several recycling facilities due to insufficient demand. In the recycled polypropylene (rPP) market, bale prices remain weak, as ample availability and low prices of virgin PP continue to limit the competitiveness of recycled alternatives.

 

Although there has been some interest and limited trials involving Post-Consumer Recycled (PCR) materials, these have not yet translated into contract volumes sufficient to support meaningful market growth. This is particularly evident in dark-colored and industrial-grade rPP, where buyers increasingly favor cheaper virgin resin options. Overall, the ongoing oversupply of virgin PP remains a key factor suppressing recycled resin prices, keeping rPP values at historically low levels.

 

While natural and white food-grade rPP prices have shown relative stability, demand for black and post-industrial grades remains subdued, as buyers continue to shift toward virgin materials and lower-specification standard grades. A meaningful market recovery is therefore unlikely unless structural conditions in the virgin resin market change. Clearer signs of recovery in either pricing or demand are not expected to emerge until 2026.