Finding stability

Apart from the automotive sector, which has an oversupply of finished products, according to a plastics reprocessor based in the East South Central region, generation of plastic scrap appears to be relatively steady as of mid-December.

“It’s about where you’d expect it to be this time of year,” a reprocesor based in the South Atlantic region says, adding that some slowing has occurred as one would expect with the start of the winter season.

Regarding demand, a broker based in the Northeast says it appear to be “pretty level going into the end of the year.” He adds, “That is not to say that there are some outliers with each grade that have increased demand. For example, we are selling more HDPE N (high-density polyethylene natural) and PET (polyethylene terephthalate) to some specific end users.”

The reprocessor in the South Atlantic region characterizes domestic demand for the recycled flake and pellets his company produces as good, adding that it may be “a little better than normal.”

His company largely deals in HDPE, low-density polyethylene (LDPE) and polypropylene (PP). “This time of year, demand is driven a lot by the pipe market,” he says of recycled HDPE in particular. “As long as it’s a mild winter, demand is pretty good.”

The reprocessor continues, “Demand for recycled plastics is up slightly over last year and much better than in 2014.”

“Demand for recycled plastics is up slightly over last year and much better than in 2014.” – a reprocessor based in the South Atlantic region

He describes 2017 as the best of the last three years in terms of his company’s profitability. The reprocessor credits that in part to the decrease in pricing for available feedstock and to pricing stability for his company’s finished material.

“I really think that pricing for both PE and PP will remain steady, but many companies seem to be holding off purchases,” the reprocessor in the East South Central region says. “We have moved some loads via spot sales at a reduced price, and people are definitely taking advantage of that, which leaves me to believe there is pent-up demand.”

The broker says demand from Southeast Asia for certain grades has picked up. “We are seeing some interest with MRP (mixed rigid plastics), rigid PVC (polyvinyl chloride) and EPS (expanded polystyrene) exports,” he says. “The activity has risen a little over the last month or two as everyone is trying to get their orders in before the end of the year and on the water.”

However, when it comes to shipping plastic scrap to China, the broker says, “I would not be taking a chance to ship things into China right now in the current trade climate.”

When it comes to transporting material, new electronic logging requirements are a source of concern for the reprocessor based in the East South Central region. She says trips of less than 700 miles that otherwise could have been made in one day could now take two days, affecting material flow and cost. “It’s already a hard enough business environment without these onerous requirements.”