Seasonal Slowdown

The winter holidays mean different things to different people. For those involved in processing postconsumer and postindustrial plastics, they generally mean slower generation and weaker demand. And 2012 is proving to be no exception to traditional norms.

A reprocessor based in the East describes generation as of late November 2012 as substantially slower than in the summer months of June and July, particularly for flexible packaging.

Demand is no more robust, he says. “Demand across all materials is weak, and pricing is only supported by [the] cost of prime,” the reprocessor says, adding that “little organic demand exists.”

Large buyers have stopped purchasing material or have lowered the prices they are offering to levels he describes as unsustainable for reprocessors.

Not all markets are quiet, however. “We have seen some increased demand from India for various paper and plastic grades,” the reprocessor says. “This we believe is mostly due to lower volume coming out of Europe as well as some currency and inflation arbitrage as the rate of internal inflation in the rupee outstrips the value of the rupee in relation to the U.S. dollar.”

He describes PVC (polyvinyl chloride) demand as “unusually strong” for late November and adds that demand for PP (polypropylene) repro and PE (polyethylene) has declined.

When it comes to transporting orders for material, the reprocessor says his company has moved to using rail rather than trucking for long-haul shipments. “This has helped with cost though typically adds several days to delivery,” he adds.

In the instances when his company must ship by truck, the reprocessor does not describe availability as tight, however, he adds that there is little room for negotiation on rates.

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