STEADY AS SHE GOES
Plastics reprocessors are hopeful that the recent announcement by General Motors will send some additional material their way. The car manufacturer announced that it would produce an additional 60,000 automobiles before the end of the year and called 1,300 employees back to work, citing demand from the "Cash for Clunkers" program. However, sources generally say they think any boost in auto manufacturing as a result of the program, which concluded Aug. 24, will be modest and short-lived.
"It’s going to take a little while," a reprocessor based in Illinois says of the potential benefit resulting from ramped up auto production. "The Tier 2 guys are probably going to get some orders. I imagine that it is going to have some kind of a benefit; I don’t see it being anything fabulous."
Another recycler based in the Midwest also says he thinks any benefit to plastics reprocessors and recyclers as a result of the uptick in auto production will be temporary. "It’s not going to have as much of an effect on us as it will someone in Detroit or Chicago," he adds, noting that there are more suppliers to the auto industry in those cities.
Generation of post-consumer material appears to be holding steady or increasing slightly, according to sources. "Municipal generation seems to be increasing because people seem to be eating more meals at home," the recycler based in the Midwest says, noting that milk jugs are a growing percentage of the residential stream in the areas his company serves.
"Post-consumer materials are holding steady, but we are still waiting for additional volume of post-industrial material, especially for engineering grades," notes a reprocessor based in the Chicago area. "Most companies are still consuming all that they are generating." He adds that demand for nylon, acetal and polycarbonate (PC) remains high among engineering resins, while HDPE (high-density polytheylene) and LDPE (low-density polyethylene) are also enjoying good demand.
Commodity grade plastics, such as polypropylene (PP), polyethylene terephthalate (PET) and polystyrene (PS), are enjoying good domestic demand; however, markets for engineering grade resins are nearly nonexistent, according to a recycler based in Illinois.
"Demand is increasing for PP and HDPE as virgin prices are starting to increase," a reprocessor based in Michigan says. He also credits the price increases HDPE and PP have experienced to increased production on the part of molders.
"Domestic demand has been steady," the Illinois-based recycler says. "Pricing is even going up a little. Export demand is mixed to steady; some commodities are good and some are downright slow."
Tariffs are still an issue when it comes to exporting material to Hong Kong, which is causing some consumers to lower their buying prices, according to sources. "There were strong restrictions in the Hong Kong Port, especially for post-consumer scrap materials, but that seems to have been relieved as of recently," the reprocessor based in the Chicago area says.
Chinese demand for plastic scrap remains strong, in part because of China’s economic stimulus program, he adds. His company is shipping material to Hong Kong as well as to all ports in mainland China, he says. "The China agricultural industry is driving up the demand for LDPE and LLDPE (linear low-density polyethylene) materials."
The Michigan-based recycler says, "Overseas shipping seems to be taking longer to deliver product, and prices are increasing."
Containers for export shipments can be difficult to come by, depending on a company’s location. However, container rates are lower than they were compared to this time last year, the recycler based in the Midwest notes. "Reprocessors and bigger companies that can control a lot of container volume are going to have a leg up over everyone else," he adds.
"We are coming into our busier season," the reprocessor based in Illinois says. "I think business will be steady come November or December, and then it will be pretty tough again."
(Additional news about plastics recycling markets is available online at www.RecyclingToday.com.)