Processors hunger for quality recovered plastics.
The 2013 Paper Recycling Conference & Trade Show session “A World Hungry for Plastics,” Thursday, Oct. 17, addressed opportunities and challenges associated with plastics recycling. Panelists David Bender of Perpetual Recycling Solutions, Richmond, Ind.; Scott Saunders of KW Plastics, Troy, Ala.; and Mike Smith of Mervis Industries, Danville, Ill., shared their insight on topics ranging from quality concerns to current market conditions during the Q&A session moderated by Recycling Today’s Dan Sandoval.
Perpetual Recycling’s PET (polyethylene terephthalate) recycling plant opened in January of this year in Richmond. The facility recycles PET bottles and thermoforms into flake suitable for food-grade applications. Bender said yields vary considerably by MRF (material recovery facility) for the PET bales the company receives, ranging from 42 percent on the low end to 72 percent on the high end. Perpetual has begun tracking yield by MRF, Bender said, adding that pricing would be adjusted based on this factor.
Saunders, with high-density polyethylene (HDPE) and polypropylene (PP) recycler KW Plastics, said his company’s yield loss ranges from 18 to 29 percent per bale. He added that KW Plastics sends out teams of buyers to suppliers to grade material in an effort to improve bale yield.
Smith said Mervis pays its suppliers more for material that has been well-segregated. Perpetual does the same, with Bender saying the company pays as must as 30 percent more for material of benchmark quality.
Bender predicted that MRFs will begin to invest in improving the quality of the plastic bales they are producing once they see that their competitors are receiving a premium for higher quality material.
Smith was optimistic about quality in the near future, predicting improvements in the next six to nine months.
Mervis recycles some 40 million pounds of industrially generated plastics per year and brokers an additional 20 million pounds, the company’s Smith said. Regarding current market conditions, he said HDPE pricing had been trending downward in the third and fourth quarter of 2013. Smith said there was a glut of injection-grade material on the market, helping to drag down pricing. Since China launched Operation Green Fence in February, he said, the film market for China has dried up. The market for metalized polycarbonate (PC), like that found in CDs and DVDs, also has weakened since the advent of the Green Fence.
“Mixed plastics will remain a challenge for all of us,” he added.
The 2013 Paper Recycling Conference & Trade Show will conclude Friday, Oct. 18, with the session “Dollar Signs,” which will address venture capital financing, business valuation and succession planning.
The conference will return to Chicago in 2014 with a slight name change to the Paper and Plastics Recycling Conference. The Marriott Downtown Chicago Magnificent Mile will again host the event Oct. 8-10.