"I’m cautiously optimistic," a thermoplastic recycler based in the Southeast says about the forecast for industrial grade thermoplastics as the first quarter of 2006 advances. Markets appear to be more stable than they were at this time last year, she says. "There was not enough material out there this time last year."
A Midwest recycler has a slightly more bullish take on the outlook for recycled resins looking forward. "All signs are pointing toward a strong first half of the year in all plastics," he says.
Industrial generation appears to have slowed down a bit since the start of the year, but the Southeast recycler says it is "hard to tell if it is decreased production or lag time from the holidays." While a downturn in industrial generation is expected around the holidays, "If it lingers into [March], then it might be a trend," she adds.
Much of the company’s scrap comes from the region’s automotive industry. However, the thermoplastic recycler does not expect to be negatively affected by the recent plant closings announced by Ford Motor Co. and General Motors, because most of the automakers in the area are foreign based companies. "If someone is going to drop production, someone is going to fill the gap," she says.
The Midwest recycler also mentions that industrial generation has slowed at the start of the year, but he adds that it has been more apparent in paper than in plastics.
The Midwest recycler says he expects markets to remain stable for recycled industrial resins and bottle grade plastics. "Prices dropped off a little but, but not a lot," he says of bottle grade resins, with PET dropping "a couple of cents" and colored HDPE jugs falling only a penny since the start of the year.
He adds that natural HDPE is "staying pretty strong," with prices in the low-30s for baled material, while PET is selling in the mid-teens.
Demand for material remains strong, the Midwest recycler notes. "It’s all we can do to keep up with our needs here right now. There has been no pullback."
He reports strong performances in the first quarter of 2006 for a number of recycled resins. "I haven’t seen any pricing drop off for film scrap," the Midwest recycler says. He’s also seen strong, steady demand for polypropylene and PPO (polyphenylene oxide) in the last six or seven months, and says he expects demand for the material to continue for a while longer.
Trucking issues are still negatively affecting plastics recyclers and consumers, though it has eased up a bit in the Southeast following the turmoil created by hurricanes Katrina and Rita. "Trucking seems better," the Southeast recycler says. For a time, it was difficult to get trucks to transport material in the region, because the drivers were holding out for work from the Federal Emergency Management Agency (FEMA), which was reportedly paying $4 per mile, making it difficult for recyclers to compete.
Fuel surcharges are still common, the Southeast recycler says, and will likely remain for the foreseeable future.
While the hurricanes may have had a negative effect on trucking, the Southeast recycler says they have had a positive effect on PVC demand. Once again, FEMA is playing a role. PVC is used to make underpinnings for mobile homes, which the agency is placing with residents who were displaced by the hurricanes and the flooding in the Gulf Coast region.
This is good news for recyclers, as overseas PVC demand "has dried up," according to the Southeast recycler. "Plants coming online in Asia are fulfilling that demand," she says. Chinese New Year has also impeded overseas demand.
The Midwest recycler says that all plastic grades are enjoying good markets right now. "ABS and polystyrene are not having any trouble moving," he says. "Demand is out there for all of these grades, and supply is not an issue."
(Additional news about plastics recycling markets is available online at www.RecyclingToday.com.)
U.K. GROUP TO RESEARCH SCRAP PLASTIC EXPORTS
England-based Waste & Resources Action Programme (WRAP) has commissioned a study that will look at scrap plastic export trends.
GHK Consulting Ltd. is conducting the study, which is supported by Recoup and is expected to be completed this spring.
The goal of the study is to provide an accurate view of the effect that future exports will have on the plastics recycling industry in the United Kingdom.
The study will look at the world supply of recycled plastics to give context to the U.K. exports and to identify where trends in other countries may have an impact on the international market. It will cover what the group refers to as "the major plastic scrap streams," including commercial and industrial sources as well as consumer packaging and material that may emerge as a result of new legislation such as WEEE and ELV.
WRAP Director of Materials Liz Goodwin says the study will "help ensure that the future trends and risks are better understood, making more accurate planning and investment decisions possible."
The key objectives of the study include:
• Mapping and assessment of the current export market for U.K. recovered plastics, including a description of the types of market served, geographical destination, tons recycled, the types of plastics and the prices paid;
• Projections for future demand for recovered plastic by each destination and material type throughout the next three, five and 10 years; and
• Assessment of the balance between collection and end markets for the next three, five and 10 years.
PLASTICS RECYCLER EXPANDS
Mountain Valley Recycling recently has announced that it has added a new processing line to its production facility in Morristown, Tenn. The company, which recycles plastic film wrap, also announced plans to open additional facilities in the coming year.
The new line in Tennessee is expected to add 15 million pounds of recycling capacity per year.
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Mountain Valley also says that it has placed equipment orders for two additional recycling plants this year. When these new plants come online, the company expects to have a total capacity of 70 million pounds of scrap plastic per year.
In addition to its expansion plans for 2006, Mountain Valley Recycling is undertaking site selection for three additional plastic film recycling facilities to be constructed in 2007.
The first opening is scheduled for May 2006 with a 90,000-square-foot facility in Ontario, Canada. Future recycling facilities will be located in Nevada and Texas to accommodate the flow of recovered material from Mountain Valley’s sourcing partner, NextLife Recycling.
ECORESIN EXPANDS IN NORTH CAROLINA
Plastics recycler EcoResin, Randleman, N.C., has announced that it is expanding its operations with the opening of a recycling facility in Rutherford County, N.C.
A $150,000 grant from the state’s One North Carolina Fund is assisting the company in its expansion. The investment for the expansion will total roughly $4.2 million, which will be spent during the next three years.
EcoResin recycles industrial scrap plastics into pellets, which are then sold to companies in the automotive and packaging industries.
In a statement released by the company, Darren Lynch, president of EcoResin, says, "We have selected North Carolina as the site for expansion because of the skilled employee base, the access to key suppliers and customers and the state’s commitment to the plastics industry."
The One North Carolina Fund assists in recruiting and expanding quality jobs by providing financial assistance to businesses or industries deemed by Gov. Mike Easley to be vital to a healthy and growing state economy. Through the use of the fund, 17,000 jobs and $2 billion in investment have been created since 2001.