The normal winter slowdown

Tight availability of plastic scrap has led to a pricing increase to start the year.

Plastic scrap generation has slowed as is typical in the early part of each year, which is serving to increase or maintain pricing.

“Availability is tight, and pricing for scrap is steady to increasing,” a Midwest-based reprocessor of rigid polyolefin scrap says.

A contact with a material recovery facility (MRF) based in the Midwest says, “Supplies are going through their normal winter slowdown. For example, we ship 400,000 pounds of PET (polyethylene terephthalate) in the summer months, and [in January] we will ship 290,000 pounds.”

Regarding domestic demand, the MRF operator says, “PET seems to be perky, and it normally isn’t until March before summer buying trends start to develop.”

While PET bale pricing increased in January, natural and mixed-color high-density polyethylene (HDPE) scrap maintained its pricing month over month. “This could change by March when processors are starting to build volumes for furniture and pipe manufacturing,” the MRF operator says.

“You couldn’t give this away two years ago, but now it has decent demand with generous pricing.” – a MRF operator in the Midwest says of MRF film

He adds that more HDPE reprocessing capacity is coming online in North America this year, which should help to maintain or increase prices for HDPE bales.

Austria-based packaging producer Alpla Group is among the companies adding HDPE recycling capacity. In late 2021, the company opened its $22.9 million plant in Toluca, Mexico, which is designed to produce more than 16,000 tons annually of recycled-content HDPE in pellet form. A planned expansion could increase capacity to more than 33,000 tons annually starting in the second half of the year.

Low-density polyethylene (LDPE) film scrap also is in strong demand, the MRF operator says. Even MRF film is of interest, he adds. “You couldn’t give this away two years ago, but now it has decent demand with generous pricing. Beyond sustainability, processors have learned how to clean this material, making for better yields.”

Sunil Bagaria, president of GDB International, New Brunswick, New Jersey, is expanding his company’s film recycling capacity by adding three lines later this year. Bagaria says he expects to be able to produce 80 million tons of LDPE and linear-LDPE postconsumer resin (PCR) as of the first quarter of next year.

When GDB began producing PCR, he said the biggest issue was limited demand for recycled plastics. Now Bagaria says securing sufficient supply to feed his lines will be his foremost concern.

David Hudson, founder of Houston-based Circulus, a new reprocessor of LDPE and LLDPE film with a plant in Riverbank, California, that can produce more than 40 million pounds of PCR annually, says scrap is generally available as of early 2021.

“For the most part, pricing is up year over year,” he says.

Circulus has two plants under construction in Oklahoma and Alabama that Hudson says will open this year.

February 2022
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