The circular economy that is growing in many countries around the world, oil prices, competition from virgin polymers

The differentiated collection gave us, after the transformation, a raw material for the production of granules, ground and densified suitable for the production of plastic products, allowing us to close the circle of the circular economy.

Now the world is changing and we need to rethink a production and distribution model that no longer considers China as the dominant market and can find a solution towards competition with virgin commodity prices.

Once upon a time there was China which swallowed all the low-value waste of raw materials in bales from the world’s recycling collection, leaving us Westerners with the illusion that we had done all we had to do to create a virtuous circle on waste.

Collection, selection, use of the most noble post-consumption materials through the production of polymers, sale in China of unused waste and distribution of “sellable” polymers in lucrative markets: this was the work of Western recycling economies.

Until 2017 our circular economy revolved around this paradigm and we were deluded to be able to create a green and profitable business with this system.

But when China decided to no longer buy the bales of plastic waste,recyclers were divided into two categories:

• Those who collected post-consumer and post-industrial waste from the market,selling it as an unprocessed raw material, immediately understood the commercial danger and the consequences that this stop could create in the future. In fact, in a few months Western markets were filled with poor quality plastic waste that no longer had an immediate location.
• Those who were involved in the processing of waste from post-consumption, buying mainly at national auctions the waste in the form of mixed plastic that came from our cities. Taking advantage of the blockade of Chinese imports of plastic waste they began to sell the same product in the form of a grain.

Everyone, more or less, took advantage of the opportunities that this market offered, in the form of important contracts in terms of tons sold monthly and payments in advance, making the happiness of entrepreneurs.

Few thought that the party could end and, therefore, they did not ask the problem of investing to qualify the product, as objectively, both the LDPE, and the PP or PP/PE, mixtures composed of post-consumption waste, are very sensitive and unstable in quality.

In addition, in some cases, the Chinese market was looking for granules of very low value, with the aim of compressing the price as much as possible, so that all commercial intermediaries could make room. Part of the post-consumption processing waste was “added” to the grain to reduce waste to be taken to landfill and lower the cost of the grain.

A product so disqualified what prospects can you have today?

Perhaps we have wasted precious time because today we see some problems that are not easy to solve:

1. The Chinese market probably won’t come back, agreeing to become the world’s dustbin again, either in the form of plastic bales or polymers recycled from low-quality post-consumption. Over the years,Beijing will increase its recycling quota and will have more and more raw material available to produce post-consumption polymers it has always bought in the West in the form of waste, grinding or grain.The government is moving towards a circular economy policy in all social sectors, whether in waste, renewable energy and pollution control.
2. Western manufacturers have not invested enough and in time to increase the quality of polymers from post-consumption, through recipes, selective methods, technical agreements with the manufacturers of packaging products, which reduce the performance problems that input generates,aiming only to minimize production costs, to have an increasingly competitive price that emptied their raw material stock every month. The importance of quantity and very little to the quality of the product has been considered almost exclusively.
3. The circular economy works if recycled plastics can compete more and more with virgin plastics in large-scale use, but if quality remains very far away, there is no price or obligation in use that allows for widespread use.As long as the rating, which the market gives to polymers made from post-consumer material,remains at the “junk” level, it will be difficult to imagine a real increase in consumption.
4. The variable of the price of crude oil, with the declines never seen to date that would seem to be held in the shortterm, pushes economic competition between virgin raw materials and recycled materials,leading to a strong discrimination against the use of the latter. Not even the highest quality post-consumption polymers, such as blowing or extrusion HDPE,would be able to withstand a commercial comparison with virgin polymers, if there was not, in some cases for marketing reasons, the obligation to use recycled raw materials.

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