BIR World Mirror on Plastics - Issue May 2015

There have been huge fluctuations in the price of crude oil during the early part of 2015. There is one question in the minds of many people in the plastics scrap industry: Is there a direct correlation between the oil prices and plastics scrap prices?

Considering the price movements during the last six months, I am of the opinion that in Europe, for sure, there is no direct link between the prices of these two commodities. I will explain to you why. During the recent December-January period, the oil price decreased substantially, with the NYMEX-quoted WTI oil price dipping from US$ 68 to US$ 47 per barrel over this period. At the same time, prices of LDPE - the most important plastics scrap grade - fell too from around Euro 520 to Euro 410 per tonne in Europe.

When the oil price increased to US$ 55 per barrel in late February, scrap prices also started to creep up. But when oil prices slid to around US$ 45 per barrel during mid-March, the plastic scrap price did not decline. On the contrary, it increased to almost Euro 560 per tonne, which is higher than the price prevailing before the oil price drop (...)

by Surendra Patawari Borad
Gemini Corporation NV
Chairman of the Plastics Committee

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