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The net result has been that rigid natural bales are currently trading at more than four times the price of mixed-coloured, and rigid natural transparent pellet ex-works NWE (northwest Europe) at more than €200/tonne above rigid natural honeycomb ex-works NWE pellets.

Although some reprocessers have been producing material from flexibles for a number of years, the current market size stands at less than 100,000 tonnes/year, according to market estimates.

Many local authorities still do not allow flexibles into recycling streams, and many waste managers do not yet have the capability to process this material. Instead, typically flexible material is included in what are colloquially referred to as ‘MERF’ bales - which are bales of mixed plastic material that has been rejected by a municipal recycling facility for reprocessing or sorting and separating.

Nevertheless, separated collection systems are becoming increasingly common, particularly in the UK where major supermarket chains Sainsbury’s and Tesco have introduced flexible R-PE and R-PP collection points within the past two years.

Post-consumer material is typically sold on a mixed-coloured basis and material reprocessed from it is predominantly used for bin bag production. However, it is the post-commercial sector that could lead to a rapid increase in the availability of material suitable for use in primary packaging applications.

Post-commercial bales are made up of pre-consumer waste from the retail industry, which is typically used in the distribution of products to point-of-sale for applications such as wrapping pallets for transport.

As a result, this material is typically clear and rarely comes into direct contact with the product itself, meaning that it typically does not become odourised and contamination is limited. Contamination levels are typically kept below 2%, and it can be used as a feedstock to create near virgin-like mechanically recycled material (although as with all mechanically recycled materials, it does suffer from tensile strength degradation with each cycle).

Pellets produced from flexible bales are typically broken down in to three grades from least to most transparent, natural honeycomb, natural translucent, and natural transparent.

The spread between feedstock post-commercial natural flexible bales and transparent pellets - which are the most desirable grade from the packaging sector - is currently €950-1,050/tonne on average in Europe. This compares favourably, for producers, with a spread of €700-800/tonne between rigid natural post-consumer bales and rigid natural transparent pellets.

With regulation against single-use plastics continuing to intensify, and public pressure at an all-time high, underlying demand from packaging is expected to continue to sharply increase over the next few years.

The bulk of R-LDPE currently produced in Europe is not suitable for use in packaging. Scaling-up the collection of flexibles could change that.

Mark Victory and two of his colleagues at ICIS recently joined us for a webinar on the current state of the recycled plastics market.Watch the on-demand webinar here!