Recycled PP demand suffers a bigger slump than virgin grades in Europe as consumers switch to cheaper products. The greater fall in demand has led to a bigger decrease in prices.
Before inflation and the war, demand for recycled polypropylene (PP) grades expericend a boom. Moreover, a period of severe scarcity of PP provided an extra boost to demand for recycled grades.
But as inflation began to squeeze household budgets, consumers apper to be switching to cheaper non-recycled alternatives.
What is more, an oversupply of virgin polymers and attractive prices also led to a negative impact on demand for recycled materials.
Price movements reflect the current trends in the past few months, namely most recycled PP prices decreased faster than virgin PP.
However, some buyers note a continuous lack of recycled PP. While this is possible, given the ongoing disruptions to supply chains, it is unlikely that it represents the entire market.
As activity continues to slow down amid a looming energy crisis, recycled PP demand will most likely continue to suffer. During a downturn in economic activity, consumers and businesses will tend to focus on their sqeezed budgets. As such it is likely that many will continue to rely more on cheaper and therefore non-recycled products.