Ending the year on a high note

Departments - Commodities Plastics

Reprocessors anticipate a positive start to markets in 2021.

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December 29, 2020

A number of recycled resins are ending 2020 on a high note despite the difficult first half of the year, sources say. This has reprocessors feeling positive about markets heading into 2021.

“We are hoping for a strong kick-off for 2021,” says a contact with a reprocessor primarily of postindustrial material that has operations in the Southeast.

2020 got off to a bad start, she says, and remained difficult through the first half of the year. In the second half, the reprocessor says conditions improved considerably.

Early in the pandemic, she says her company was able to work off of its inventory as inbound material slowed down. It also sourced scrap from other recyclers.

“Quality is outshining availability issues. If they can’t produce a high-quality repro, they are not going to mess with it. Quality is more important than price.” – a reprocessor based in the Midwest says of lower quality plastic scrap

Since August of last year, however, she says her company has been “extremely busy” as manufacturers “got back to work and started making scrap.”

In fact, in September and October, she says her company did more business than in those months in 2019. While November and December were a little slower than September and October, they also were busier than in 2019.

She attributes some of that strength to manufacturers trying to catch up after pandemic-related shutdowns. But hurricanes that affected the Gulf Coast also disrupted virgin plastic production to the benefit of recycled resins.

A Midwest-based contact with a global plastic recycler and distributor says polycarbonate (PC) and acrylonitrile butadiene styrene are in short supply, and “prices have gone crazy.” He says reprocessed PC is 30 cents more per pound in mid-December than it was in August, with orders 12 weeks out.

Prices for all polyolefins also have increased, the Midwest-based reprocessor says, and supply has tightened. “The pyrolysis guys are poking around, too,” he adds, noting that they are after lower grade material that might need secondary processing to make it desirable to mechanical recyclers.

For reprocessors, “Quality is outshining availability issues,” he says. “If they can’t produce a high-quality repro” from the scrap on offer, “they are not going to mess with it. Quality is more important than price,” he adds.

The reprocessor based in the South says demand for recycled polypropylene “has been crazy this year,” while injection-grade high-density polyethylene (HDPE) and fractional melt HDPE also have been in high demand. Recycled low-density polyethylene (LDPE) has been in demand for film applications as states such as California mandate recycled content in these products.

The reprocessor based in the Midwest affirms the recycled LDPE demand.

Shannon Dwire, president of Millennium Recycling Inc., which operates a material recovery facility (MRF) in Sioux Falls, South Dakota, says markets for the plastics her MRF is generating seem relatively strong. “I think, overall, the plastic market is doing OK,” Dwire adds. “More brokers are calling, and that tells me there is some more use going on, so it’s better than it was.”

Pricing for HDPE is strong, she says. “With HDPE, we sell everything we have right here in the Midwest. It’s been a steady flow, and markets for HDPE seem to have held.”

She says demand for Nos. 3-7 plastics also has improved relative to last year. “More companies are interested in it,” she says of that material.