Plastic scrap continues to make gains in pricing, demand
Plastic scrap continues to make gains in pricing, demand
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Demand and pricing remain healthy for many grades of plastic scrap, says Vince Gupta, president of Prime Plastic Products Inc., Vista, California. He describes demand for the polyolefin grades he primarily deals in as being “enormously strong” and “strongly outstripping supply.”
Gupta says all the polyethylene grades he deals in “are on fire” in terms of demand and pricing. In fact, he adds, “All commodity grades have taken off.”
Keng Baloco-Wong, who manages product sales and logistics for the material recovery facilities (MRFs) operated by Athens Services, headquartered in City of Industry, California, also notes strong demand for plastic scrap. “We have seen an increase recently in domestic demand for postconsumer grades,” she says. “An uptick in price has followed, which is refreshing. For the first few months of the pandemic, demand and pricing both were depressed.”
Scott Saunders, general manager of high-density polyethylene (HDPE) and polypropylene (PP) reclaimer KW Plastics, Troy, Alabama, says supplies of HDPE and PP scrap have tightened as collections were delayed by the winter weather that affected much of the country in mid-February. Demand for postconsumer resin (PCR) also has risen in light of the weather-related shutdowns that affected the petrochemical sector in Texas, reducing supplies and increasing the price of virgin material.
This scenario is quite different from early in the COVID-19 pandemic. As oil prices declined in part because of reduced demand, so did virgin resin prices, which led some plastic consumers to shift from using PCR to using virgin or off-spec resin. “We see this shifting back,” Baloco-Wong says.
In addition to the mid-February weather, ongoing issues with trucking and shipping container availability are affecting the movement of material.
“Movement has been a challenge the past few months for both export and domestic,” Baloco-Wong says. “We are dealing with equipment shortages, congestion and vessel delays,” she says of ocean shipping. “Domestic moves also have been a challenge. Increasing freight rates make securing trucking more difficult.”
She says a shortage of labor arising from the pandemic and recent weather events have contributed to trucking difficulties. “Both factors have disrupted the normal flow of outbound movement. Operators are challenged in moving material and managing tight floor space.”
Baloco-Wong says export demand is strong. “Taiwan and Korea are active buyers; however, Malaysia is the strongest market in Southeast Asia. There are also smaller outlets in South America, but Southeast Asia is the strongest market.” She says consumers in these countries and regions are buying HDPE, PP, polyethylene terephthalate (PET) and mixed rigid plastics.
Miriam Holsinger, vice president of operations and business intelligence with Eureka Recycling, which operates a MRF in Minneapolis, says, “We are able to sell all of our material in North America, but this summer and fall it was very difficult to move PET, despite public commitments by brands to purchase more recycled content.
“We have seen increased demand in PET from Mexico, which has helped maintain movement of material when the market softened this fall,” she continues. “We have always sold some of our tubs and lids to Canada, and that market has been consistent.”
PET pricing recently has increased, though it came too late for PET reclaimer CarbonLite Holdings LLC, headquartered in Los Angeles. That company, which has facilities in Riverside, California; Dallas; and Reading, Pennsylvania, announced March 8 that it filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The company cites pressures directly related to the coronavirus pandemic, including temporary production slowdowns caused by employee illness, the low price of virgin plastic relative to recycled PET (rPET) and the nine-month delay in the grand opening of its Pennsylvania facility caused by travel restrictions that held up equipment commissioning by European manufacturers, as factors in its decision to reorganize.
Some suppliers to the company have said it has been slow to pay prior to 2020, however.
“With CarbonLite out of the market, there will be a temporary disruption in California and Texas in the movement of PET in surrounding areas,” Baloco-Wong says. “However, we are seeing a strong demand overall for PET, both overseas and in other domestic outlets. This demand will continue to increase, especially with legislation requiring products to have increased recycled content.”
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Source: Recycling Today
Plastic scrap continues to make gains in pricing, demand
<![CDATA[Demand and pricing remain healthy for many grades of plastic scrap, says Vince Gupta, president of Prime Plastic Products Inc., Vista, California. He describes demand for the polyolefin grades he primarily deals in as being “enormously strong” and “strongly outstripping supply.”Gupta says all the polyethylene grades he deals in “are on fire” in terms of demand and pricing. In fact, he adds, “All commodity grades have taken off.”Keng Baloco-Wong, who manages product sales and logistics for the material recovery facilities (MRFs) operated by Athens Services, headquartered in City of Industry, California, also notes strong demand for plastic scrap. “We have seen an increase recently in domestic demand for postconsumer grades,” she says. “An uptick in price has followed, which is refreshing. For the first few months of the pandemic, demand and pricing both were depressed.”Scott Saunders, general manager of high-density polyethylene (HDPE) and polypropylene (PP) reclaimer KW Plastics, Troy, Alabama, says supplies of HDPE and PP scrap have tightened as collections were delayed by the winter weather that affected much of the country in mid-February. Demand for postconsumer resin (PCR) also has risen in light of the weather-related shutdowns that affected the petrochemical sector in Texas, reducing supplies and increasing…