Bale prices continue to decline

Pricing for poly- ethylene 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 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.

“One big surprise is seeing pricing coming down when fuel prices are still high. Historically, that hasn’t been the case.” – Jeff Snyder of Rumpke Waste & Recycling

PureCycle, in its second- quarter 2022 earnings report, notes that completion of its Ironton site is expected in the fourth quarter of this year, followed by initial pellet production by year-end. The Ironton site will have an annual capacity of 107 million pounds of recycled PP. PureCycle’s technology, which originally was developed by Procter & Gamble, removes color and odor, producing 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 prices as being at “more normal levels” compared with those seen over the last year.

A recycled plastic supplier headquartered on the West Coast 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.

Despite the softening bale prices, he says “recycling is holding its own pretty nicely.”

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.” However, with talk of a possible recession, the West Coast-based contact says he’s concerned about the strength of demand going forward. While he says his sales don’t reflect softer demand presently, it is no longer the “go-go period of insatiable demand where we could not keep enough supply.”

He adds that if inflation spurs a recession, it likely will be milder than the previous one as most individuals and companies are not as leveraged as they were previously. “Consumers are radically different with less debt, relatively speaking.”