Plastics

Secondary plastics enjoyed good markets on balance in 2006, though the year ended on a somewhat sour note for a few grades.

Pricing for plastic film, or LDPE, has declined slightly during the last several months. According to a source based in the Midwest, Wal-Mart has flooded the market with material, causing film vendors to lower their prices. "There’s just an over-abundance of film with Wal-Mart’s plastic fully out on the market," he says. Film pricing could decline further as 2007 progresses if the housing market continues its slump and demand for plastic lumber cools off, the recycler adds.

PET also became more difficult to move in the Midwest with Wellman’s exit from the recycled PET market. (Wellman announced in late September of 2006 that it is restructuring its U.S. fiber operations, consolidating its fiber production to its Palmetto plant in Darlington, S.C., and closing fiber capacity at its Johnsonville, S.C., plant. The company expects to sell its Material Recycling Division, which has a capacity of nearly 200 million pounds per year.)

With the closing of Waste Management’s Chicago facility for sorting mixed plastics, mixed bales have also been more difficult to move, according to the Midwestern recycler. However, the export market has helped to absorb some of this material. "The export market has been supporting the domestic market," he says. The slight shake up created by the shuttering of the Wellman and Waste Management plants "proved the need for the export market," according to the recycler. "While we try to keep as much material as we can domestically, we have to export to keep material moving."

As of mid-December, Chinese buyers were actively buying, building their inventories in preparation for the Chinese New Year.

Overall, however, he says demand and pricing for post-consumer PET have been fairly consistent, with some buyers attempting to take the price of HDPE down.

However, in the Southeast, efforts to lower the price of HDPE have been less successful. "Earlier this month, it looked like it was going to come down," one recycler in the region says. "I’m not actually seeing that" She adds that the decline may come yet before the close of the year.

"I think specific to HD there is plenty of demand and not enough product," she says. "Adding exporters in there, it makes it very, very hard, especially on natural." The result is that the material is more difficult to find, unless the buyer wants to go above the market, she says, adding that bales of natural HDPE are selling in the 27-cent-to-30-cent range in her area right now. On the West Coast, she says pricing is even more aggressive in light of export market influence.

Generation has not been aggressive, however. "It’s slow," a recycler on the Gulf Coast says. "A lot of people are doing scheduled shutdowns for maintenance this time of year." She expects such temporary closures to last about six weeks before ramping up with mid-January.

The Gulf Coast recycler says markets for all grades seem to be rather ho-hum, with PET and ABS taking a "pretty good hit" over the last two months, losing a nickel per pound. However, she thinks the correction was warranted. "Some of the markets kind of got out of control, seeing unsustainable highs. Consumers are trying to force them down," she says.

Polypropylene seems to be moving well, largely because it is a commodity grade that is used in many applications, the Gulf Coast-based recycler says. "That is the one thing I can count on right now as far as purchasing and selling."

Styrene, on the other hand, is suffering from a glut of material, as one large food service manufacturer put millions of pounds on the market, the Gulf Coast-based recycler says.

She adds that she’s finding markets for nearly everything else, just not at the peak prices from earlier in 2006. "It’s not a true buyers’ market. Not yet."

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