By Neil Merrett
The Bureau of International Recycling (BIR) says that the conflict has led to an overall reversal of a downward price trend for recycled plastics that has been experienced in the market over the previous two years.
Henk Alssema, president of the BIR Plastics Division and chief executive of the Netherlands—based Inviplast group, said that there had been a notable shift in demand for recycled plastics that was currently exceeding supply capabilities.
He added that while the prices for recycled materials had got “sharply higher” since February, this increase was not as high as changes in the rates for virgin products.
Henk made the comments in an update published on the BIR website noting that recent geopolitical developments in the Middle East and the resulting disruption to the Strait of Hormuz shipping line had seen a notable reversal of trends in the plastics market.
He said: “After two years characterised by low prices and an abundance of cheap imported virgin material, the situation has now reversed. Prices for materials such as PP, HDPE, LDPE, HIPS, ABS and PET have surged dramatically in a short period of time, with virgin grades in many cases more than doubling in price.”
Henk said that it was important to look at the price impacts of the conflict in line with concerns about the resulting loss of life and other civilian impacts.
He said: “These price developments are the result of a deeply concerning and tragic situation. The conflict has a profound human impact and once again highlights the vulnerability of global supply chains.”
At a market level, the analysis noted that producers had, since onset of the conflict, been looking at sourcing low-cost virgin materials from foreign markets in response to months of warnings about potential disruption.
However, companies were now looking at alternatives such as domestic supplies of recycled products in response to recent supply chain challenges.
Henk stated that the increased cost of recyclate was less pronounced and “extreme” than the rises in prices for sourcing virgin materials that were up by between 20% to 20% in some cases.
He said: “More importantly, demand is currently structurally exceeding supply. This imbalance is being intensified by growing uncertainty in the market, leading many companies to stockpile raw materials and thus driving prices even higher.”
“What is clear is that end producers have woken up, with their focus shifting towards security of supply. This is translating into a growing willingness to enter into long-term agreements for the purchase of European recycled materials.”
Despite the recent trends in pricing for both virgin and recycled materials, the BIR analysis said that questions remained over whether this represented a longer-term market shift, as opposed to a response to a short-lived crisis.
Should efforts to reach a long-term ceasefire prove successful, Henk said that market analysts believed that there could be an additional 12-month period of ongoing instability in plastics demand.
The BIR noted that amendments planned to the EU’s Waste Shipment Regulation, set to come into force later this year, intended to restrict exports of plastic materials outside of Europe was expected to increasing materials potentially available for recycling.
Henk argued that the ‘positive development’ of an increase in recyclate supply also posed challenges around capacity and capability to effectively repurpose the materials for different uses.
These concerns build on recent market challenges that has seen a reduction in recycling capacity in both the EU and the UK due to market consolidation and operators having to scale-back their operations due to concerns about demand.
The British Plastics Federation noted that more than 17 UK plastic recycling plants had closed in a 24-month period up to the end of 2025, in reflection of these market supply challenges. These included concerns about the cost of virgin polymers compared with recycled materials, resulting in arguments for a rethink of existing financial support measures.
Henk added: “Scaling up production to meet current demand is therefore far from straightforward.”
The BIR noted that the European Commission has received a joint letter signed by 138 companies calling for a delay and rethink of plans for the Packaging and Packaging Waste Regulation (PPWR).
It said that the letter’s signatories raised concerns about the impact to their operations for the PPWR’s aims to introduce mandatory requirements on the level of recycled plastic uses in packaging under the legislation as planned.
Henk said the letter reflected uncertainty over the level of long-term demand for recycled plastics.
He said: “As long as structural obligations are lacking or weakened, demand for recyclate remains dependent on external factors such as raw material prices and geopolitical developments rather than being driven by consistent and predictable policy.”
“It is widely acknowledged that, while further clarification of regulations may be necessary, the current moment calls for consistent and stable policy. Without clear and enforceable frameworks, the sector will remain cyclical and vulnerable whereas investments in recycling capacity require long-term certainty.”
This story was originally published by our sister title, Materials Recycling World.