Japan Sustainability "Recycling as National Security: Investment Plans a..."

Research evidence excerpt

Japan Sustainability "Recycling as National Security: Investment Plans a..."

ear of additional Analyst

domestic capacity for upgrading to higher-grade material, indicating a commitment to a phineas.glover@ubs.com

more advanced domestic recycling loop (Fig.3, Fig.4). +852-3712 3917

Lydia Brunton

Geopolitical risks to drive procurement diversification, incl. recycled materials Analyst

The closure of the Strait of Hormuz has highlighted again the vulnerability of resource lydia.brunton@ubs.com

+61-2-9324 2172

supply chains. With around three months having elapsed since the outbreak of the

conflict, certain materials have become difficult to procure, and we believe this is no Jarvis Lam

longer an issue that will simply be forgotten once temporary price spikes subside. We Analyst

jarvis.lam@ubs.comshow geopolitical risk by material on page 6 (related reports 1, 2). As a measure to

+852-2971 7701

mitigate supply shortage risks, we expect progress in diversification of materials

procurement, including the use of recycled materials. For example, in Canon’s multi- Tomoko Yoshihara

function printer business, certain models have achieved a reuse rate of 95.5%, which Analyst

tomoko.yoshihara@ubs.comwe believe helps reduce procurement risk, improve cost stability, and lower costs.

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In plastics, the price gap between virgin and recycled materials is narrowing

In Europe, virgin PET prices have recently exceeded those of rPET, while price gaps ESG

between virgin materials and recycled alternatives (rPP and rHDPE) have also narrowed, Environmental

with the price gap for packaging pellets reported (30 April) to have been largely Socialeliminated. While this will likely temporarily boost demand for recycled materials in GovernanceM