Plastics

EASING DOWNWARD

Demand and pricing for nearly all commodity grade and engineering plastics appears to be moving downward gradually, as China curtails its purchasing and as more virgin capacity comes online domestically.

A thermoplastics reclaimer based in Alabama says that exports to China have slowed because the country is producing enough virgin material to meet its demands.

"People are playing a waiting game," the Alabama reclaimer says. "Big buyers are lowering the price they’ll pay for material."

A West Coast-based recycler and broker of post-consumer plastics says the material is going through a price adjustment, though demand is still strong. "What is basically happening is virgin resin prices are coming down."

Declining resin prices are related to excess virgin capacity. "Every five to 10 years, the industry goes through supply bubbles," as it adds capacity that it has to grow into, the West Coast recycler says. The decline would have occurred earlier had it not been for Hurricane Katrina, which knocked virgin resin producers in the Gulf Coast region offline, he says.

Prices for virgin and recycled resins may continue to decline during 2006 unless oil prices escalate or the industry experiences another supply disruption, sources say.

(Additional news about plastics recycling markets is available online at www.RecyclingToday.com.)