Hot demand for natural HDPE

Departments - Commodities Plastics

Demand for natural high-density polyethylene scrap has increased as a result of more recycled-content commitments.

August 26, 2020

Before the COVID-19 pandemic, many consumer packaged goods (CPG) companies were ramping up their sustainability commitments and figuring out ways to add recycled content to their products and packaging.

Then the COVID-19 pandemic hit this spring, and many commitments made by these large CPG companies to increase their usage of recycled plastics were put on pause to address the global health crisis. But, with the pandemic in its sixth month as of September, businesses and individuals are trying to establish a new normal, with CPGs turning their attention back to their recycled-content goals.

“COVID hit and disrupted these goals; but, now, the reality is COVID is COVID, and there are more efforts being made to make sure our packaging has more scrap involved,” a MRF operator in the Midwest says.

Natural high-density polyethylene (HDPE) is hot as a result of these new recycled-content commitments, a reprocessor based in the South says.

“I think we’re in very unique times here where HDPE natural has become the most valuable product coming into recycling facilities.” – a MRF operator in the Upper Midwest

“The [HDPE] natural market is just unbelievably hot,” a MRF operator in the Southeast says, adding that postconsumer natural HDPE bottle bales are selling for 50 cents per pound in his region.

The MRF operator in the Midwest adds that natural HDPE bale prices have yo-yoed a bit this year—they were up before COVID-19 hit, then went down at the start of the pandemic and have since escalated again.

“I think we’re in very unique times here where HDPE natural has become the most valuable product coming into recycling facilities,” a MRF operator in the Upper Midwest says. “Aluminum is slightly below HDPE natural. At one point, natural was 30 percent higher than aluminum, which was crazy.

He continues, “To see natural go up was a great plus for our industry. The downside, we had other things, such as aluminum, come down.”

Recycled-content commitments are “really keeping the scrap price healthy in the face of much weaker virgin resin prices,” the reprocessor in the South says. “We’ve also seen virgin resin prices bump up a little bit in the last two weeks, and that has really helped the demand for mixed colored materials and polypropylene,” he adds.

However, with prices rising for natural HDPE, the reprocessor says quality concerns have emerged. “Anytime you see a large spread in value between natural and colored, you see too much colored material ending up in natural. We’re addressing that as we see it with suppliers.”

Generation of postconsumer polyethylene terephthalate (PET) scrap has been up throughout the summer months for many MRF operators, which is typical, but demand has not necessarily kept pace.

“I don’t think there’s been much of a decrease in demand, with the exception of one of the major end markets had a fire,” the Upper Midwest MRF operator says. He is referring to the Aug. 9 fire at Evergreen Plastics, a PET recycler in Clyde, Ohio.

Such a demand disruption when the national market is dealing with excess PET scrap supply only exacerbates that situation, the MRF operator says.