RECYCLATE MARKET GERMANY
Energy price cap a competitive advantage for German firms / Suppliers from other EU countries see themselves at a disadvantage
 Anyone who still wants to do business has to calculate with a sharp pencil (Photo: Pexels/Marina Agrelo) |
The recent discussions at Plasteurope.com’s price panel on recyclates and regranulates have made one thing abundantly clear: despite the criticism of the German government’s slow approach towards capping gas and electricity prices, the situation in other European countries seems to be much more difficult. In particular, smaller recycling and compounding companies from Belgium, the Netherlands, and Austria are complaining about having to add safety buffers for energy to their calculations and are as a result losing orders due to the higher level of prices.
Belgium and the Netherlands have also introduced energy price caps, but they only cover private households, not small businesses. In Germany, on the other hand, the two gas price caps also favour small and medium-sized enterprises with consumption of less than 1.5 mn kWh. Electricity is capped at 40 cents per kWh for small businesses, and at 13 cents for large ones with a consumption of over 30,000 kWh/y.
As Plasteurope.com price expert Martin Bäcker noted, “Usually, a merchant calculates with the average value from the past few years and sets his prices on its basis. In view of the volatility of energy prices in the past 18 months, the safety buffer will currently tend to be somewhat higher.” With energy accounting for 40% to 55% of production costs, the price cap gives German companies a clear competitive advantage, he added.
Related: Costs for materials, energy fuel concerns about the plastics economy in Germany – KI Dialog survey
From the point of view of foreign competitors, the secure calculation base for German recyclers mainly affects fixed-price contracts that run over a quarter or half-year and are primarily concluded with smaller processors. Large buyers, on the other hand, procure material mostly on the spot market or through monthly renegotiated contracts.
In addition, smaller processors often use more recyclates than their large competitors, who are often required by customers to employ primary materials.
The complaint of recyclers from Belgium, the Netherlands, and Austria against their own governments focuses mainly on recyclates based on standard thermoplastics. The disadvantages are probably also present in the case of engineering recyclates, but they are easier to factor into the usually significantly higher end prices.
Belgium and the Netherlands have also introduced energy price caps, but they only cover private households, not small businesses. In Germany, on the other hand, the two gas price caps also favour small and medium-sized enterprises with consumption of less than 1.5 mn kWh. Electricity is capped at 40 cents per kWh for small businesses, and at 13 cents for large ones with a consumption of over 30,000 kWh/y.
As Plasteurope.com price expert Martin Bäcker noted, “Usually, a merchant calculates with the average value from the past few years and sets his prices on its basis. In view of the volatility of energy prices in the past 18 months, the safety buffer will currently tend to be somewhat higher.” With energy accounting for 40% to 55% of production costs, the price cap gives German companies a clear competitive advantage, he added.
Related: Costs for materials, energy fuel concerns about the plastics economy in Germany – KI Dialog survey
From the point of view of foreign competitors, the secure calculation base for German recyclers mainly affects fixed-price contracts that run over a quarter or half-year and are primarily concluded with smaller processors. Large buyers, on the other hand, procure material mostly on the spot market or through monthly renegotiated contracts.
In addition, smaller processors often use more recyclates than their large competitors, who are often required by customers to employ primary materials.
The complaint of recyclers from Belgium, the Netherlands, and Austria against their own governments focuses mainly on recyclates based on standard thermoplastics. The disadvantages are probably also present in the case of engineering recyclates, but they are easier to factor into the usually significantly higher end prices.
21.02.2023 Plasteurope.com [252215-0]
Published on 21.02.2023
German version of this article...