Markets transition into fall

Departments - Plastics

Subscribe
October 5, 2015
Recycling Today Staff

Overseas demand for secondary plastics remains weak, according to industry sources contacted in late September. “Exports to Asia have slowed down since June and are expected to remain weak through the end of the year,” says a Midwest-based compounder, processor and recycler of engineering thermoplastics.

“Export demand is very sluggish, and mixed materials are not actively sought,” a recycler based in the Midwest adds.

He says processors increasingly are reluctant to handle mixed materials in light of suppressed pricing and lower demand from Chinese consumers. “Our company normally handles 300 or 400 tons per month of mixed plastics grades that we sort or sell to others,” the recycler says. “We are no longer accepting mixed plastics.”

A thermoplastics recycler based in the Southeast also laments the current state of overseas demand. “The export market has been pretty slow,” she says.

However, the Southeast-based recycler says overseas buyers have been inquiring about reprocessed material, adding that this is not typical. “They may just be price fishing,” she says.

Domestic demand is fair to strong, depending on the material, sources say.

The recycler based in the Southeast says that while domestic demand has been steady, “it feels like there is more scrap out there than can be used right now.”

The compounder, processor and recycler based in the Midwest characterizes domestic demand as “very strong, especially for PP (polypropylene) and PE (polyethylene).”

He adds, “PP natural and mixed color remains in high demand as many buyers are stockpiling as they know the prices will eventually rise. They are buying now, anticipating the rate hike in Q1 2016.”

The recycler based in the Midwest says HDPE (high-density polyethylene) is currently in demand. “Bottle-grade color HDPE and other fractional-melt HDPE grades are in good demand with the fall agricultural pipe season starting.”

He continues, “Some engineering grades are moving well too.”
 


PET (polyethylene terephthalate) is not fairing quite as well, however. “PET pricing is dwindling as demand is easing,” the Midwest-based recycler says.

“There is additional capacity for processing of PET coming on stream, but rPET (recycled PET) is butting up against virgin PET” in terms of pricing, he adds.

Scrap generation remains steady as the summer draws to a close. The compounder, processor and recycler based in the Midwest goes so far as to say scrap generation is increasing along with manufacturing production.

As we enter the fourth quarter of 2015, the recycler based in the Southeast says she expects secondary plastics markets to cool off as temperatures across most of the U.S. do as well. “The last quarter is usually slow because of holidays and shutdowns,” she says.

The Southeast-based recycler adds, “We won’t see a pickup until the first quarter of next year. There is nothing on the horizon that is going to stimulate the markets.”