Ongoing contraction
Ongoing contraction
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Pricing for polyethylene terephthalate (PET), high-density polyethylene (HDPE) and polypropylene (PP) bales has continued to soften as the summer advances, despite continued demand for these materials.
“The demand for all plastics continues to be high as PCR [postconsumer recycled] material is still very active in making new products,” says Jeff Snyder, director of recycling at Rumpke Waste & Recycling, headquartered in Cincinnati. Rumpke operates 12 recycling facilities, including two large material recovery facilities (MRFs) in Columbus, Ohio, and Cincinnati.
He adds that demand for HDPE and PP is particularly strong as new recycling facilities, including PureCycle Technologies’ PP recycling facility in Ironton, Ohio, are coming online in the Midwest.
PureCycle, in its second-quarter 2022 earnings report, notes that mechanical completion of its Ironton site is expected in the fourth quarter of this year, followed by initial pellet production by year-end. The company says it is in the final phases of construction, with 14 of the 26 modules having been delivered and lifted into place. The Ironton facility will have an annual capacity of 107 million pounds of what it describes as “ultrapure” recycled PP. PureCycle’s technology, which originally was developed by Procter & Gamble, removes color and odor, producing a recycled PP with “virgin-like quality.”
Other factors that have influenced bale pricing in the past appear to be having less of an effect this year. “One big surprise is seeing pricing coming down when fuel prices are still high,” Snyder says. “Historically, that hasn’t been the case. We usually see PCR plastics prices go up as fuel prices are high, but that didn’t happen in July.”
Instead, pricing for PCR took a steep decline in July and further softened in August. However, Synder describes pricing as being at “more normal levels” compared with those seen over the last year. “Pricing earlier this year was up by 12 to 15 percent” as compared with pricing at the end of July.
A contact based on the West Coast for a company with operations throughout the U.S. says some reprocessors were paying $1.20 per pound for natural HDPE bales earlier this year but now are paying 48 cents per pound.
When looking back at the market in the first quarter of the year, he says “there was a lot more optimism and a torrid pace of demand.” With talk of a possible recession, the West Coast-based recycler says he’s concerned about the strength of that demand going forward. While he says his company’s sales don’t necessarily reflect softer demand presently, it is no longer the “go-go period of insatiable demand where we could not keep enough supply.”
Some of his customers also are taking longer to pay, the West Coast recycler notes. He says companies that customarily paid within 60 days are now pushing out payments to 80 and 90 days.
He adds that if inflation spurs a recession, it likely will be milder than the one we experienced earlier in the pandemic as most individuals and companies are not as leveraged as they were previously. “Consumers are radically different with less debt, relatively speaking.”
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Source: Recycling Today
Ongoing contraction
<![CDATA[Pricing for polyethylene terephthalate (PET), high-density polyethylene (HDPE) and polypropylene (PP) bales has continued to soften as the summer advances, despite continued demand for these materials.“The demand for all plastics continues to be high as PCR [postconsumer recycled] material is still very active in making new products,” says Jeff Snyder, director of recycling at Rumpke Waste & Recycling, headquartered in Cincinnati. Rumpke operates 12 recycling facilities, including two large material recovery facilities (MRFs) in Columbus, Ohio, and Cincinnati. He adds that demand for HDPE and PP is particularly strong as new recycling facilities, including PureCycle Technologies’ PP recycling facility in Ironton, Ohio, are coming online in the Midwest. PureCycle, in its second-quarter 2022 earnings report, notes that mechanical completion of its Ironton site is expected in the fourth quarter of this year, followed by initial pellet production by year-end. The company says it is in the final phases of construction, with 14 of the 26 modules having been delivered and lifted into place. The Ironton facility will have an annual capacity of 107 million pounds of what it describes as “ultrapure” recycled PP. PureCycle’s technology, which originally was developed by Procter & Gamble, removes color and odor, producing a recycled PP with…