Industrial flows slow down

Plastics reprocessors that handle industrially generated scrap, particularly from the automotive sector, have seen a slowdown in the flow of incoming material, according to sources. Demand for reprocessed material also has softened.

A reprocessor based in the Southeast says scrap generation has decreased in April because of plant closures in the automotive sector and at other manufacturing plants related to the COVID-19 outbreak.

A Midwest-based reprocessor also notes the absence of scrap from the automotive sector. However, he adds, “Our medical customers and retail customers are still operating at normal levels.”

Given the nonexistent generation from the automotive sector, he adds that his company has laid off all its employees who were servicing this sector.

His company is under contract with most of its generating customers, the reprocessor in the Midwest says, so it doesn’t have to compete with other reprocessors to get the scrap that is available.

“Demand for scrap is down, so people who are actively buying are getting more offers than we can handle,” says a second reprocessor who is based in the Southeast.

“Inbound purchases and outbound sales have slowed,” the first reprocessor in the Southeast says. “We have been having to source from recyclers this past week that had excessive inventory or no movement to their end users in order to fill our demand for April.”

The Midwest-based reprocessor characterizes demand as “normal” from companies that still are operating under the “essential business” designation. “We have some customers who are pushing back their April orders to May, and their May orders are on hold.”

“We have been having to source from recyclers this past week that had excessive inventory or no movement to their end users in order to fill our demand for April.” – a reprocessor based in the Southeast

Injection-grade high-density polyethylene (HDPE) and polycarbonate/acrylonitrile butadiene styrene demand is relatively healthy, the first Southeast reprocessor says.

“There are still orders for polypropylene,” she adds, “but the market is soft right now, so the pricing isn’t where recyclers need it to be.

“Export is terrible,” she continues, referring to pricing and movement.

The second Southeast-based reprocessor, who specializes in high-molecular-weight, blow-molding and injection-grade HDPE, says pricing for his recycled materials is low and signs of softening demand are emerging. “I don’t know exactly where it is going to go right now. So far, this month has been good,” he says as of mid-April.

The first reprocessor based in the Southeast says her company is taking advantage of the slowdown in business by working on projects that were already underway or starting new projects.

Operational changes her company has enacted include running two 10-hour shifts four days per week instead of three eight-hour shifts.

She adds, “All of the contract employees from staffing agencies have been dismissed until production picks up.”