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Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough, Senior Analyst Mark Victory, Senior Editor Fabrizio Galié, Global Lead of Polymers Insight
42

Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Mar 18, 2020

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Page 1: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Separating fact from fiction

What is the reality for the future of global plastic waste recycling

Helen McGeough Senior Analyst

Mark Victory Senior Editor

Fabrizio Galieacute Global Lead of Polymers Insight

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 2

Webinar logistics

This event is fully streamed You will hear audio via your media player only

This live webinar is being recorded

If you have technical problems please use the QampA function to speak to the online technical support

If you would like to ask a question at any point during the presentation please submit it via the ldquoQampArdquo function at the bottom of your screen

We will answer as many questions as possible at the end of the webinar

Finally the recording and the slides will be available after the live event

wwwiciscom 3

Recycled PET

Recycled PE

The impact of recycled product demand on virgin material producers

Agenda

Recycled PET

Helen McGeough Senior Analyst

wwwiciscom 5

Current market situation - drivers

SUSTAINABILITYREGULATION

ECONOMICS

wwwiciscom 6

Current market situation - drivers

SUSTAINABILITYREGULATION

ECONOMICS

wwwiciscom 7

Supply demand dynamics

Demand

Demand for recycled feedstocks continues to grow

Driven by legislation in some markets but primarily by industrybrands looking to meet agendas of greater sustainability in resources used carbon foot impact and initiatives to (or be seen to) tackle plastic pollution

Supply

Currently mechanically sourced recycled material is constrained by issues in collectionsorting infrastructures and lack of sufficient reclamation capacity in the near term

Chemical recycling is an area of focus for the industry but will be a long term solution for supply

Virgin markets

Demand for recycled feedstocks will take an increasing share of the market (depending on polymer)

The growth in demand for the recyclable polymers will grow at the expense of the non recyclable polymers and so those markets will potentially see a decline in growth as this shift takes place

wwwiciscom 8

Summary of Europe PET recycling industry 2017

Consumption and collection volume increased by 3 in 2017 no growth in collection beyond market growth

Deposit return schemes (DRS) facilitate greater collectionbull Of the 9 countries with +80 collection rate 7 operate a DRS

Limited increase in rPET output in 2017 reflecting increasing contamination of bale feedstocks

Reclamation capacity underutilised by 300kt in 2017 but expect annual study to show full utilisation in 2018 bull Limited growth in recycling capacity in the short term

PET tray market continues to grow more countries in Europe are expected to expand existing collection to include these as limited activity in 2017

lt2m tonnes

gt3m tonnes

12m tonnes

Consumption Collection rPET output

17m tonnes

Recycling input

wwwiciscom 9

Impact of regulations

Waste Framework Directive

bull Municipal waste reuse target 50 by 2020 55 by 2025 65 by 2035

bull Packaging and Packaging Waste directive 55 plastic packaging recycled by 2030

bull 100 plastic packaging must be recyclable by 2030

European Circular Economy Strategy for Plastics adopted January 2018

China waste import ban ndash effective 1 January 2018

Single Use Plastic Directive (SUP)

bull Plastic beverage bottles with caps 90 collected for recycling by 2027 (77 by 2025)

bull Mandatory recycled content in bottles of 25 by 2025 30 by 2030

wwwiciscom 10

Brand pledges

Brand pledges from major beverage companies aiming for 50 recycled content

New players enter the food grade RPET market brands and retailers

Recyclable pledges ndash potential substitution

Supply constrained

bull High quality colourless bales

bull Food grade RPET capacity

Intense competition for RPET supply

wwwiciscom 11

Packaging dominates RPET end use in West Europe

Sheet40

Blow-moulding29

Fibre16

Strapping10

Other5

2017

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 2: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 2

Webinar logistics

This event is fully streamed You will hear audio via your media player only

This live webinar is being recorded

If you have technical problems please use the QampA function to speak to the online technical support

If you would like to ask a question at any point during the presentation please submit it via the ldquoQampArdquo function at the bottom of your screen

We will answer as many questions as possible at the end of the webinar

Finally the recording and the slides will be available after the live event

wwwiciscom 3

Recycled PET

Recycled PE

The impact of recycled product demand on virgin material producers

Agenda

Recycled PET

Helen McGeough Senior Analyst

wwwiciscom 5

Current market situation - drivers

SUSTAINABILITYREGULATION

ECONOMICS

wwwiciscom 6

Current market situation - drivers

SUSTAINABILITYREGULATION

ECONOMICS

wwwiciscom 7

Supply demand dynamics

Demand

Demand for recycled feedstocks continues to grow

Driven by legislation in some markets but primarily by industrybrands looking to meet agendas of greater sustainability in resources used carbon foot impact and initiatives to (or be seen to) tackle plastic pollution

Supply

Currently mechanically sourced recycled material is constrained by issues in collectionsorting infrastructures and lack of sufficient reclamation capacity in the near term

Chemical recycling is an area of focus for the industry but will be a long term solution for supply

Virgin markets

Demand for recycled feedstocks will take an increasing share of the market (depending on polymer)

The growth in demand for the recyclable polymers will grow at the expense of the non recyclable polymers and so those markets will potentially see a decline in growth as this shift takes place

wwwiciscom 8

Summary of Europe PET recycling industry 2017

Consumption and collection volume increased by 3 in 2017 no growth in collection beyond market growth

Deposit return schemes (DRS) facilitate greater collectionbull Of the 9 countries with +80 collection rate 7 operate a DRS

Limited increase in rPET output in 2017 reflecting increasing contamination of bale feedstocks

Reclamation capacity underutilised by 300kt in 2017 but expect annual study to show full utilisation in 2018 bull Limited growth in recycling capacity in the short term

PET tray market continues to grow more countries in Europe are expected to expand existing collection to include these as limited activity in 2017

lt2m tonnes

gt3m tonnes

12m tonnes

Consumption Collection rPET output

17m tonnes

Recycling input

wwwiciscom 9

Impact of regulations

Waste Framework Directive

bull Municipal waste reuse target 50 by 2020 55 by 2025 65 by 2035

bull Packaging and Packaging Waste directive 55 plastic packaging recycled by 2030

bull 100 plastic packaging must be recyclable by 2030

European Circular Economy Strategy for Plastics adopted January 2018

China waste import ban ndash effective 1 January 2018

Single Use Plastic Directive (SUP)

bull Plastic beverage bottles with caps 90 collected for recycling by 2027 (77 by 2025)

bull Mandatory recycled content in bottles of 25 by 2025 30 by 2030

wwwiciscom 10

Brand pledges

Brand pledges from major beverage companies aiming for 50 recycled content

New players enter the food grade RPET market brands and retailers

Recyclable pledges ndash potential substitution

Supply constrained

bull High quality colourless bales

bull Food grade RPET capacity

Intense competition for RPET supply

wwwiciscom 11

Packaging dominates RPET end use in West Europe

Sheet40

Blow-moulding29

Fibre16

Strapping10

Other5

2017

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 3: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 3

Recycled PET

Recycled PE

The impact of recycled product demand on virgin material producers

Agenda

Recycled PET

Helen McGeough Senior Analyst

wwwiciscom 5

Current market situation - drivers

SUSTAINABILITYREGULATION

ECONOMICS

wwwiciscom 6

Current market situation - drivers

SUSTAINABILITYREGULATION

ECONOMICS

wwwiciscom 7

Supply demand dynamics

Demand

Demand for recycled feedstocks continues to grow

Driven by legislation in some markets but primarily by industrybrands looking to meet agendas of greater sustainability in resources used carbon foot impact and initiatives to (or be seen to) tackle plastic pollution

Supply

Currently mechanically sourced recycled material is constrained by issues in collectionsorting infrastructures and lack of sufficient reclamation capacity in the near term

Chemical recycling is an area of focus for the industry but will be a long term solution for supply

Virgin markets

Demand for recycled feedstocks will take an increasing share of the market (depending on polymer)

The growth in demand for the recyclable polymers will grow at the expense of the non recyclable polymers and so those markets will potentially see a decline in growth as this shift takes place

wwwiciscom 8

Summary of Europe PET recycling industry 2017

Consumption and collection volume increased by 3 in 2017 no growth in collection beyond market growth

Deposit return schemes (DRS) facilitate greater collectionbull Of the 9 countries with +80 collection rate 7 operate a DRS

Limited increase in rPET output in 2017 reflecting increasing contamination of bale feedstocks

Reclamation capacity underutilised by 300kt in 2017 but expect annual study to show full utilisation in 2018 bull Limited growth in recycling capacity in the short term

PET tray market continues to grow more countries in Europe are expected to expand existing collection to include these as limited activity in 2017

lt2m tonnes

gt3m tonnes

12m tonnes

Consumption Collection rPET output

17m tonnes

Recycling input

wwwiciscom 9

Impact of regulations

Waste Framework Directive

bull Municipal waste reuse target 50 by 2020 55 by 2025 65 by 2035

bull Packaging and Packaging Waste directive 55 plastic packaging recycled by 2030

bull 100 plastic packaging must be recyclable by 2030

European Circular Economy Strategy for Plastics adopted January 2018

China waste import ban ndash effective 1 January 2018

Single Use Plastic Directive (SUP)

bull Plastic beverage bottles with caps 90 collected for recycling by 2027 (77 by 2025)

bull Mandatory recycled content in bottles of 25 by 2025 30 by 2030

wwwiciscom 10

Brand pledges

Brand pledges from major beverage companies aiming for 50 recycled content

New players enter the food grade RPET market brands and retailers

Recyclable pledges ndash potential substitution

Supply constrained

bull High quality colourless bales

bull Food grade RPET capacity

Intense competition for RPET supply

wwwiciscom 11

Packaging dominates RPET end use in West Europe

Sheet40

Blow-moulding29

Fibre16

Strapping10

Other5

2017

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 4: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Recycled PET

Helen McGeough Senior Analyst

wwwiciscom 5

Current market situation - drivers

SUSTAINABILITYREGULATION

ECONOMICS

wwwiciscom 6

Current market situation - drivers

SUSTAINABILITYREGULATION

ECONOMICS

wwwiciscom 7

Supply demand dynamics

Demand

Demand for recycled feedstocks continues to grow

Driven by legislation in some markets but primarily by industrybrands looking to meet agendas of greater sustainability in resources used carbon foot impact and initiatives to (or be seen to) tackle plastic pollution

Supply

Currently mechanically sourced recycled material is constrained by issues in collectionsorting infrastructures and lack of sufficient reclamation capacity in the near term

Chemical recycling is an area of focus for the industry but will be a long term solution for supply

Virgin markets

Demand for recycled feedstocks will take an increasing share of the market (depending on polymer)

The growth in demand for the recyclable polymers will grow at the expense of the non recyclable polymers and so those markets will potentially see a decline in growth as this shift takes place

wwwiciscom 8

Summary of Europe PET recycling industry 2017

Consumption and collection volume increased by 3 in 2017 no growth in collection beyond market growth

Deposit return schemes (DRS) facilitate greater collectionbull Of the 9 countries with +80 collection rate 7 operate a DRS

Limited increase in rPET output in 2017 reflecting increasing contamination of bale feedstocks

Reclamation capacity underutilised by 300kt in 2017 but expect annual study to show full utilisation in 2018 bull Limited growth in recycling capacity in the short term

PET tray market continues to grow more countries in Europe are expected to expand existing collection to include these as limited activity in 2017

lt2m tonnes

gt3m tonnes

12m tonnes

Consumption Collection rPET output

17m tonnes

Recycling input

wwwiciscom 9

Impact of regulations

Waste Framework Directive

bull Municipal waste reuse target 50 by 2020 55 by 2025 65 by 2035

bull Packaging and Packaging Waste directive 55 plastic packaging recycled by 2030

bull 100 plastic packaging must be recyclable by 2030

European Circular Economy Strategy for Plastics adopted January 2018

China waste import ban ndash effective 1 January 2018

Single Use Plastic Directive (SUP)

bull Plastic beverage bottles with caps 90 collected for recycling by 2027 (77 by 2025)

bull Mandatory recycled content in bottles of 25 by 2025 30 by 2030

wwwiciscom 10

Brand pledges

Brand pledges from major beverage companies aiming for 50 recycled content

New players enter the food grade RPET market brands and retailers

Recyclable pledges ndash potential substitution

Supply constrained

bull High quality colourless bales

bull Food grade RPET capacity

Intense competition for RPET supply

wwwiciscom 11

Packaging dominates RPET end use in West Europe

Sheet40

Blow-moulding29

Fibre16

Strapping10

Other5

2017

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 5: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 5

Current market situation - drivers

SUSTAINABILITYREGULATION

ECONOMICS

wwwiciscom 6

Current market situation - drivers

SUSTAINABILITYREGULATION

ECONOMICS

wwwiciscom 7

Supply demand dynamics

Demand

Demand for recycled feedstocks continues to grow

Driven by legislation in some markets but primarily by industrybrands looking to meet agendas of greater sustainability in resources used carbon foot impact and initiatives to (or be seen to) tackle plastic pollution

Supply

Currently mechanically sourced recycled material is constrained by issues in collectionsorting infrastructures and lack of sufficient reclamation capacity in the near term

Chemical recycling is an area of focus for the industry but will be a long term solution for supply

Virgin markets

Demand for recycled feedstocks will take an increasing share of the market (depending on polymer)

The growth in demand for the recyclable polymers will grow at the expense of the non recyclable polymers and so those markets will potentially see a decline in growth as this shift takes place

wwwiciscom 8

Summary of Europe PET recycling industry 2017

Consumption and collection volume increased by 3 in 2017 no growth in collection beyond market growth

Deposit return schemes (DRS) facilitate greater collectionbull Of the 9 countries with +80 collection rate 7 operate a DRS

Limited increase in rPET output in 2017 reflecting increasing contamination of bale feedstocks

Reclamation capacity underutilised by 300kt in 2017 but expect annual study to show full utilisation in 2018 bull Limited growth in recycling capacity in the short term

PET tray market continues to grow more countries in Europe are expected to expand existing collection to include these as limited activity in 2017

lt2m tonnes

gt3m tonnes

12m tonnes

Consumption Collection rPET output

17m tonnes

Recycling input

wwwiciscom 9

Impact of regulations

Waste Framework Directive

bull Municipal waste reuse target 50 by 2020 55 by 2025 65 by 2035

bull Packaging and Packaging Waste directive 55 plastic packaging recycled by 2030

bull 100 plastic packaging must be recyclable by 2030

European Circular Economy Strategy for Plastics adopted January 2018

China waste import ban ndash effective 1 January 2018

Single Use Plastic Directive (SUP)

bull Plastic beverage bottles with caps 90 collected for recycling by 2027 (77 by 2025)

bull Mandatory recycled content in bottles of 25 by 2025 30 by 2030

wwwiciscom 10

Brand pledges

Brand pledges from major beverage companies aiming for 50 recycled content

New players enter the food grade RPET market brands and retailers

Recyclable pledges ndash potential substitution

Supply constrained

bull High quality colourless bales

bull Food grade RPET capacity

Intense competition for RPET supply

wwwiciscom 11

Packaging dominates RPET end use in West Europe

Sheet40

Blow-moulding29

Fibre16

Strapping10

Other5

2017

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 6: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 6

Current market situation - drivers

SUSTAINABILITYREGULATION

ECONOMICS

wwwiciscom 7

Supply demand dynamics

Demand

Demand for recycled feedstocks continues to grow

Driven by legislation in some markets but primarily by industrybrands looking to meet agendas of greater sustainability in resources used carbon foot impact and initiatives to (or be seen to) tackle plastic pollution

Supply

Currently mechanically sourced recycled material is constrained by issues in collectionsorting infrastructures and lack of sufficient reclamation capacity in the near term

Chemical recycling is an area of focus for the industry but will be a long term solution for supply

Virgin markets

Demand for recycled feedstocks will take an increasing share of the market (depending on polymer)

The growth in demand for the recyclable polymers will grow at the expense of the non recyclable polymers and so those markets will potentially see a decline in growth as this shift takes place

wwwiciscom 8

Summary of Europe PET recycling industry 2017

Consumption and collection volume increased by 3 in 2017 no growth in collection beyond market growth

Deposit return schemes (DRS) facilitate greater collectionbull Of the 9 countries with +80 collection rate 7 operate a DRS

Limited increase in rPET output in 2017 reflecting increasing contamination of bale feedstocks

Reclamation capacity underutilised by 300kt in 2017 but expect annual study to show full utilisation in 2018 bull Limited growth in recycling capacity in the short term

PET tray market continues to grow more countries in Europe are expected to expand existing collection to include these as limited activity in 2017

lt2m tonnes

gt3m tonnes

12m tonnes

Consumption Collection rPET output

17m tonnes

Recycling input

wwwiciscom 9

Impact of regulations

Waste Framework Directive

bull Municipal waste reuse target 50 by 2020 55 by 2025 65 by 2035

bull Packaging and Packaging Waste directive 55 plastic packaging recycled by 2030

bull 100 plastic packaging must be recyclable by 2030

European Circular Economy Strategy for Plastics adopted January 2018

China waste import ban ndash effective 1 January 2018

Single Use Plastic Directive (SUP)

bull Plastic beverage bottles with caps 90 collected for recycling by 2027 (77 by 2025)

bull Mandatory recycled content in bottles of 25 by 2025 30 by 2030

wwwiciscom 10

Brand pledges

Brand pledges from major beverage companies aiming for 50 recycled content

New players enter the food grade RPET market brands and retailers

Recyclable pledges ndash potential substitution

Supply constrained

bull High quality colourless bales

bull Food grade RPET capacity

Intense competition for RPET supply

wwwiciscom 11

Packaging dominates RPET end use in West Europe

Sheet40

Blow-moulding29

Fibre16

Strapping10

Other5

2017

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 7: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 7

Supply demand dynamics

Demand

Demand for recycled feedstocks continues to grow

Driven by legislation in some markets but primarily by industrybrands looking to meet agendas of greater sustainability in resources used carbon foot impact and initiatives to (or be seen to) tackle plastic pollution

Supply

Currently mechanically sourced recycled material is constrained by issues in collectionsorting infrastructures and lack of sufficient reclamation capacity in the near term

Chemical recycling is an area of focus for the industry but will be a long term solution for supply

Virgin markets

Demand for recycled feedstocks will take an increasing share of the market (depending on polymer)

The growth in demand for the recyclable polymers will grow at the expense of the non recyclable polymers and so those markets will potentially see a decline in growth as this shift takes place

wwwiciscom 8

Summary of Europe PET recycling industry 2017

Consumption and collection volume increased by 3 in 2017 no growth in collection beyond market growth

Deposit return schemes (DRS) facilitate greater collectionbull Of the 9 countries with +80 collection rate 7 operate a DRS

Limited increase in rPET output in 2017 reflecting increasing contamination of bale feedstocks

Reclamation capacity underutilised by 300kt in 2017 but expect annual study to show full utilisation in 2018 bull Limited growth in recycling capacity in the short term

PET tray market continues to grow more countries in Europe are expected to expand existing collection to include these as limited activity in 2017

lt2m tonnes

gt3m tonnes

12m tonnes

Consumption Collection rPET output

17m tonnes

Recycling input

wwwiciscom 9

Impact of regulations

Waste Framework Directive

bull Municipal waste reuse target 50 by 2020 55 by 2025 65 by 2035

bull Packaging and Packaging Waste directive 55 plastic packaging recycled by 2030

bull 100 plastic packaging must be recyclable by 2030

European Circular Economy Strategy for Plastics adopted January 2018

China waste import ban ndash effective 1 January 2018

Single Use Plastic Directive (SUP)

bull Plastic beverage bottles with caps 90 collected for recycling by 2027 (77 by 2025)

bull Mandatory recycled content in bottles of 25 by 2025 30 by 2030

wwwiciscom 10

Brand pledges

Brand pledges from major beverage companies aiming for 50 recycled content

New players enter the food grade RPET market brands and retailers

Recyclable pledges ndash potential substitution

Supply constrained

bull High quality colourless bales

bull Food grade RPET capacity

Intense competition for RPET supply

wwwiciscom 11

Packaging dominates RPET end use in West Europe

Sheet40

Blow-moulding29

Fibre16

Strapping10

Other5

2017

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 8: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 8

Summary of Europe PET recycling industry 2017

Consumption and collection volume increased by 3 in 2017 no growth in collection beyond market growth

Deposit return schemes (DRS) facilitate greater collectionbull Of the 9 countries with +80 collection rate 7 operate a DRS

Limited increase in rPET output in 2017 reflecting increasing contamination of bale feedstocks

Reclamation capacity underutilised by 300kt in 2017 but expect annual study to show full utilisation in 2018 bull Limited growth in recycling capacity in the short term

PET tray market continues to grow more countries in Europe are expected to expand existing collection to include these as limited activity in 2017

lt2m tonnes

gt3m tonnes

12m tonnes

Consumption Collection rPET output

17m tonnes

Recycling input

wwwiciscom 9

Impact of regulations

Waste Framework Directive

bull Municipal waste reuse target 50 by 2020 55 by 2025 65 by 2035

bull Packaging and Packaging Waste directive 55 plastic packaging recycled by 2030

bull 100 plastic packaging must be recyclable by 2030

European Circular Economy Strategy for Plastics adopted January 2018

China waste import ban ndash effective 1 January 2018

Single Use Plastic Directive (SUP)

bull Plastic beverage bottles with caps 90 collected for recycling by 2027 (77 by 2025)

bull Mandatory recycled content in bottles of 25 by 2025 30 by 2030

wwwiciscom 10

Brand pledges

Brand pledges from major beverage companies aiming for 50 recycled content

New players enter the food grade RPET market brands and retailers

Recyclable pledges ndash potential substitution

Supply constrained

bull High quality colourless bales

bull Food grade RPET capacity

Intense competition for RPET supply

wwwiciscom 11

Packaging dominates RPET end use in West Europe

Sheet40

Blow-moulding29

Fibre16

Strapping10

Other5

2017

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 9: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 9

Impact of regulations

Waste Framework Directive

bull Municipal waste reuse target 50 by 2020 55 by 2025 65 by 2035

bull Packaging and Packaging Waste directive 55 plastic packaging recycled by 2030

bull 100 plastic packaging must be recyclable by 2030

European Circular Economy Strategy for Plastics adopted January 2018

China waste import ban ndash effective 1 January 2018

Single Use Plastic Directive (SUP)

bull Plastic beverage bottles with caps 90 collected for recycling by 2027 (77 by 2025)

bull Mandatory recycled content in bottles of 25 by 2025 30 by 2030

wwwiciscom 10

Brand pledges

Brand pledges from major beverage companies aiming for 50 recycled content

New players enter the food grade RPET market brands and retailers

Recyclable pledges ndash potential substitution

Supply constrained

bull High quality colourless bales

bull Food grade RPET capacity

Intense competition for RPET supply

wwwiciscom 11

Packaging dominates RPET end use in West Europe

Sheet40

Blow-moulding29

Fibre16

Strapping10

Other5

2017

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 10: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 10

Brand pledges

Brand pledges from major beverage companies aiming for 50 recycled content

New players enter the food grade RPET market brands and retailers

Recyclable pledges ndash potential substitution

Supply constrained

bull High quality colourless bales

bull Food grade RPET capacity

Intense competition for RPET supply

wwwiciscom 11

Packaging dominates RPET end use in West Europe

Sheet40

Blow-moulding29

Fibre16

Strapping10

Other5

2017

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 11: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 11

Packaging dominates RPET end use in West Europe

Sheet40

Blow-moulding29

Fibre16

Strapping10

Other5

2017

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 12: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 12

0

200

400

600

800

1000

1200

1400

1600

06

-Jan

-20

17

20

-Jan

-20

17

03

-Fe

b-2

01

7

17

-Fe

b-2

01

7

03

-Mar

-20

17

17

-Mar

-20

17

31

-Mar

-20

17

14

-Ap

r-2

01

7

28

-Ap

r-2

01

7

12

-May

-20

17

26

-May

-20

17

09

-Ju

n-2

01

7

23

-Ju

n-2

01

7

07

-Ju

l-2

01

7

21

-Ju

l-2

01

7

04

-Au

g-2

01

7

18

-Au

g-2

01

7

01

-Se

p-2

01

7

15

-Se

p-2

01

7

29

-Se

p-2

01

7

13

-Oct

-20

17

27

-Oct

-20

17

10

-No

v-2

01

7

24

-No

v-2

01

7

08

-Dec

-20

17

22

-Dec

-20

17

12

-Jan

-20

18

26

-Jan

-20

18

09

-Fe

b-2

01

8

23

-Fe

b-2

01

8

09

-Mar

-20

18

23

-Mar

-20

18

06

-Ap

r-2

01

8

20

-Ap

r-2

01

8

04

-May

-20

18

18

-May

-20

18

01

-Ju

n-2

01

8

15

-Ju

n-2

01

8

29

-Ju

n-2

01

8

13

-Ju

l-2

01

8

27

-Ju

l-2

01

8

10

-Au

g-2

01

8

24

-Au

g-2

01

8

07

-Se

p-2

01

8

21

-Se

p-2

01

8

05

-Oct

-20

18

19

-Oct

-20

18

02

-No

v-2

01

8

16

-No

v-2

01

8

30

-No

v-2

01

8

14

-Dec

-20

18

04

-Jan

-20

19

18

-Jan

-20

19

01

-Fe

b-2

01

9

15

-Fe

b-2

01

9

01

-Mar

-20

19

15

-Mar

-20

19

29

-Mar

-20

19

12

-Ap

r-2

01

9

26

-Ap

r-2

01

9

EUR

t

RPET and VPET prices 2017-2019

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

PET Bottles Colourless Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

PET Bottles Mixed Coloured Post-Consumer FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Mixed Coloured FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

The rise of RPET prices

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 13: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 13

Delta between RPET flake and virgin PET narrowing

0

20

40

60

80

100

120

600

700

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o R

PET

fla

ke

EUR

t

Price relationship - VPET and colourless RPET flake

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Flake Hot-Washed Colourless FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Flake Colourless

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 14: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 14

Attitudes to prices for food grade RPET have shifted

0

20

40

60

80

100

120

140

160

800

900

1000

1100

1200

1300

1400

1500

09

-Jan

-20

15

06

-Fe

b-2

01

5

06

-Mar

-20

15

03

-Ap

r-2

01

5

01

-May

-20

15

29

-May

-20

15

26

-Ju

n-2

01

5

24

-Ju

l-2

01

5

21

-Au

g-2

01

5

18

-Se

p-2

01

5

16

-Oct

-20

15

13

-No

v-2

01

5

11

-Dec

-20

15

15

-Jan

-20

16

12

-Fe

b-2

01

6

11

-Mar

-20

16

08

-Ap

r-2

01

6

06

-May

-20

16

03

-Ju

n-2

01

6

01

-Ju

l-2

01

6

29

-Ju

l-2

01

6

26

-Au

g-2

01

6

23

-Se

p-2

01

6

21

-Oct

-20

16

18

-No

v-2

01

6

16

-Dec

-20

16

27

-Jan

-20

17

24

-Fe

b-2

01

7

24

-Mar

-20

17

21

-Ap

r-2

01

7

19

-May

-20

17

16

-Ju

n-2

01

7

14

-Ju

l-2

01

7

11

-Au

g-2

01

7

08

-Se

p-2

01

7

06

-Oct

-20

17

03

-No

v-2

01

7

01

-Dec

-20

17

05

-Jan

-20

18

02

-Fe

b-2

01

8

02

-Mar

-20

18

30

-Mar

-20

18

27

-Ap

r-2

01

8

25

-May

-20

18

22

-Ju

n-2

01

8

20

-Ju

l-2

01

8

17

-Au

g-2

01

8

14

-Se

p-2

01

8

12

-Oct

-20

18

09

-No

v-2

01

8

07

-Dec

-20

18

11

-Jan

-20

19

08

-Fe

b-2

01

9

08

-Mar

-20

19

05

-Ap

r-2

01

9

03

-May

-20

19

Pri

ce r

ela

tio

nsh

ip v

irgi

n t

o F

G R

PET

EUR

t

Price relationship - VPET and FG RPET

PET Bottle Grade FD Europe Assessment Domestic Current Month Full Market Range (Mid) EURtonne

RPET Pellets Food Grade FD NWE Assessment Domestic and Export Spot 14 Days Full Market Range (Mid) EURtonne

Price relationship - VPET and RPET Food Grade Pellet

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 15: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 15

Europe PET collection volume future projection

Growth in PET recovery is behind the growth in demand for RPET product supply

2017 2018 2019 2020

2500

0

500

1000

1500

2000

Th

ou

sand

to

nn

es

Average +29

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 16: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Copyright copy 2019 ICIS ndash Private amp Confidential wwwiciscom 16

Growth rates to achieve targetshellip

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

kt

Targets for collection and recycled content

collection recycled content - 25 recycled content - 30 recycled content - 50

7 pa

6 pa

175 pa

17 pa

65 pa

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 17: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Recycled Polyethylene (R-PE)

Mark Victory Senior Editor Recycling

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 18: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 18

Structure of the R-PE Market ndash Production methods

Multiple sources of input material

bull Post-consumer

bull Post-industrial

bull Production waste

Multiple production methods

bull Hot-washed

bull Cold-washed

bull Dry-processed

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 19: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 19

Structure of the R-PE Market - Illiquidity

Market is illiquid and volume of feedstock opaque

Unlike R-PET R-PE flake market is small with pellets dominating

Pellets sold based on colour

Difference in process types means wide range of qualities and prices particularly for R-LDPE

Post-consumer waste and hot-washed pellets are markets with most transparency

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 20: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 20

Structure of the R-PE Market ndash End-uses

Major end-uses include

bull Packaging

bull Outdoor furniture

bull Pipes and construction

High wastage rates due to PP contamination

Most applications price-driven

Sustainability becoming increasingly important

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 21: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 21

Structure of the R-PE Market ndash Food Grade Shortages

UK is only current source of food-grade R-PE and only for R-HDPE

Post-consumer milk-bottle collection limited to 110000 tonnesyear

EU legislation restricting growth opportunities

Lack of food-grade material encouraging inclusion of white material to meet demand

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 22: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 22

Structure of the R-PE Market ndash Packaging Recovery Notes (PRNs)Packaging Export Recovery Notes (PERNs)

Specific to UK market

Current value at pound185tonne

Encouraging export of mixed plastic waste and shortening post-consumer HDPE bale supply

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 23: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 23

Structure of the R-PE Market ndash Asia Import Bans and Basel Amendment

China import ban leads to higher contaminants

Increased bale supply especially for LDPE

Other countries introducing bans

10 May amendment to Basel legislation likely to lengthen lead times increase costs of export

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 24: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 24

Current Market ndash LDPE Post-consumer Bale Supply

Ban on waste exports to China = Europe structural oversupply

Lower quality material being sold at a loss

In most countries negative values capped by gate fees

In Germany ban on plastic waste incineration removes price cap

Other countries expected to follow

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 25: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 25

Current Market ndash HDPE Post-consumer Bale Supply

PRN values pushing prices of UK bales higher

PERNs reducing UK bale availability

Virgin HDPE values remain key bale price-driver

Sustainability targets reducing substitution ability of packaging sector

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 26: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 26

Current Market ndash R-HDPE Pellets

Cosmetic and pharmaceutical and domestic goods packaging demand strong on sustainability

Lack of food-grade driving substitution to other pellet grades and other plastics

Demand in non-packaging applications remains weak because of near parity with virgin prices

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 27: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 27

Current Market ndash R-LDPE Pellets

Packaging applications limited mostly cost-driven

Weakening virgin prices since Q4 added downward pressure in Q1

China ban does not cover pellets

Exports to Asia remain high

Strong demand from India ahead of ban

Rising demand from secondary sheet applications

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 28: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 28

Market Evolution

Legislative framework likely to tighten

Consumer demand increasingly centred on sustainability

Pharmaceutical and cosmetic markets to pursue bespoke solutions

Pharmaceutical and cosmetic market share to increase

R-PET example suggests creation of 2-tier market

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 29: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 29

R-PE Market ndash Next Steps

Adapt to new regulatory challenges

Formalisation and standardisation of the industry

Improvements in collection and sorting

Increased transparency

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 30: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 30

The New ICIS R-PE report

Covers post-consumer HDPE and LDPE bales

R-HDPE and R-LDPE pellets

Food-grade R-HDPE pellets

Prices and supply and demand dynamics

Launching late May

Contact Mark Victory markvictoryiciscom to receive the latest prototype

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 31: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Impact of plastic recycling on virgin materials producers

Fabrizio Galiegrave Global Lead for Polymers Insight

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 32: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 32

The circular economy

Definition

The circular economy ldquoentails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the systemrdquo

(Ellen MacArthur Foundation)

End waste

of final products making them back in the

process as resources

Start from renewables

which means de-coupling from fossil fuels

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 33: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 33

The industry has to respond to consumers and legislations

DEMAND TO PRESERVE

THE ENVIRONMENT

Petrochemical producers

Brands

Distributors

Industrial users

PROMOTE COLLECTION

IMPOSE LIMITS

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 34: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 34

Implications on the polymers business at different levels

Substitution of virgin resin

Bans and limits to applications

ldquoDo more with lessrdquo

Metallocenes

Inter-polymer substitution

Multi-layer vs Mono-layer

Raw Material

Logistics including waste transfer

RampD

VOLUMES

PRODUCTS

COSTS

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 35: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 35

Short-term bans to waste transfer change trade patterns

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

Chinese ban prompted import (and production) of virgin material

Waste material redirected to SEA (Vietnam Malaysia Indonesia India others) with also Chinese factories relocating

Some routes remain unclear

Too huge volumes to be managed ports congestion insufficient logistics and processing capability

Landfill and energy recovery prevailing

Most countries introducing bans

More waste to be managed in country of origin

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 36: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 36

Long-term recycling will impact volumes

Growing share from larger recycling volumes and reduced consumption growth

Mid-term some reduction in specific applications especially single-use products and packaging

But EU 2021 ban can only interest ~5 of EPS regional consumption lower single-digits for PP and HDPE

Bans to plastic bags are more ldquoshockingrdquo eg Turkey HDPE shopping bags Jan 2019

Long-term shares growing faster

Base case scenario is evolutionary not revolutionary

0

200

400

600

800

1000

1200

1400

Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4

391590 Waste Parings And Scrap Of Plastics Nesoi

391510 Waste Parings And Scrap Of Polymers Of Ethylene

391530 Waste Parings And Scrap Of Polymers Of Vinyl Chloride

Effects of waste import ban in China

China Quarterly Import Volumes 2017-18 (Kt)

00

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

PE recycle PP recycle

Forecast polyolefins recycling growth

share of production ex-recycle on world demand

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 37: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 37

Not a ldquopure pricerdquo matter

Consumers ProducersLegislation

bull Use less packaging

(except online shop)

bull Requires alternatives

bull Re-use

bull Regional differences

(not necessarily

related to wealth)

bull Regulates waste

management

bull Regulates applications

scope

bull Alters cost-structure

bull Support logistics

bull Adapt product

portfolios

bull New solutions (tech

And business models)

bull Know-how acquisitions

bull Consider waste as a

feedstock

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 38: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Thank you

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 39: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 39

Contact us

Helen McGeough

Senior Analyst Plastics Recycling

helenmcgeoughiciscom

+44 7816 299320

Daria Grossi

Analyst Plastics Recycling

dariagrossiiciscom

+39 0331 1425312

Mark Victory

Senior Editor

markvictoryiciscom

+44 20 8652 8703

Fabrizio Galieacute

Global Lead of Polymers Insight

fabriziogalieiciscom

+39 0331 142 53 23

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 40: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 40

R-PETAnnual Data

NEW

Spend less time filtering through information with

price transparency analytics tools for the

European market

Post-consumer collection volume by country

Recycling capacity amp yields by countrySign up to receive updates

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 41: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

Circularity for Polymers

The ICIS Recycling Conference

5 November 2019 Berlin Germany

Interactive agenda

Collaborative Roundtable session

Innovation Showcase

FMCG Panel

Open Mic

Key presentations

European Commission Plastics Strategy

Recycled polyolefins and r-PET market analysis

Exclusive networking opportunities

Full value chain representation

Key reasons to attendSuper Early Bird now available

Register now and save euro200 off the standard fee

Use promocode IRC19WEBINAR to unlock this offer

Limited time offer

Check out the website for more details

wwwiciseventscomrecycling

wwwiciscom 42

Questions amp Answers

Page 42: Separating fact from fiction: What is the reality for the future of · Separating fact from fiction: What is the reality for the future of global plastic waste recycling? Helen McGeough,

wwwiciscom 42

Questions amp Answers