While prices for natural and mixed color high-density polyethylene (HDPE) and polypropylene (PP) bales have contracted, polyethylene terephthalate (PET) bottle bales have maintained their value, Bill Keegan of Dem-Con Cos. says. Dem-Con operates a material recovery facility in Shakopee, Minnesota, that serves Minneapolis-St. Paul and greater Minnesota.
Since October of last year, Keegan says, HDPE bales, particularly mixed color, have decreased considerably in price after gaining from January through July of 2021. As of February, he says natural HDPE bale prices have decreased 45 percent from their highest price last year, while mixed-color bale prices have fallen 60 percent. As of February, PP bale prices were 40 percent lower than their high last year.
He says bale prices for these polyolefin scrap grades are responding to lower virgin plastic prices. “Underlying demand for recycled content is buffering that,” Keegan says, as brand owners recognize that recycled content is a necessity, even if it’s not mandated by law.
“We’ve gone to the market and said, ‘Here’s our capacity. Once we sell it, we’re done.’” – Omar Abuaita, president and CEO, Greenbridge
The pressure is especially strong when it comes to PET packaging, which is diverting material away from fiber production. According to the “2020 PET Recycling Report” that the National Association for PET Container Resources (NAPCOR), Charlotte, North Carolina, released in late 2021, rPET use by the food/beverage and nonfood/ beverage bottle categories grew by 32 percent, surpassing fiber for the first time.
A scrap buyer for a reclaimer that primarily serves the fiber market says unless these producers are willing to pay more for bottle bales, they will go to the bottle-to-bottle market, where the mandates are at play, consumer pressure is more acutely felt and the rPET can command a higher price.
PET reclaimer Evergreen, Clyde, Ohio, is adding capacity to serve this growing market. The company began recycling to have rPET for the strapping its parent company produces. Now, roughly 95 percent of its rPET pellet production is sold for use in food-grade packaging, Evergreen General Manager Greg Johnson says.
Evergreen acquired UltrePET and Novapet from wTe Corp., Bedford, Massachusetts, in November 2021, increasing its annual rPET capacity to more than 147 million pounds. Evergreen also is adding four food-grade rPET manufacturing lines at its Clyde site, taking its overall production to 217 million pounds.
“We’ve gone to the market and said, ‘Here’s our capacity. Once we sell it, we’re done,’” Omar Abuaita, president and CEO of Evergreen’s parent company, Greenbridge, says. He adds that Evergreen is signing multiyear contracts with major consumer packaged goods companies to supply them with rPET.
Explore the March 2022 Issue
Check out more from this issue and find your next story to read.
Latest from Recycling Today
- Regenx says US facility back online
- Cliffs has money losing Q3
- BIR Autumn 2024: Supply challenges poised to grow
- Befesa reports double-digit adjusted EBITDA growth in Q3
- Companies partner to standardize build of chemical recycling plants
- Solarcycle to add recycling plant to Georgia campus
- PPRC 2024: Addressing the packaging recovery problem
- Cliffs completes Stelco acquisition