Venting frustrations

With the conclusion of Lunar New Year celebrations in China, plastic scrap exports from the U.S. have started to pick up, a reprocessor based in the Midwest says.

However, one recycler with operations throughout the U.S. and in China still characterizes that export market as “terrible.”

“Import duties of 20 cents U.S. [per pound] are more than the value of packaging plastics, and, with the exception of PC/ABS (polycarbonate/acrylonitrile butadiene styrene), there is not much demand or room for profit on the engineering plastics,” the recycler says.

He adds, “We used to be able to reduce freight costs by shipping 22 tons mixed with metal, but it’s hard to ship more than 16 to 18 tons of only plastics.”

Because of China’s restrictions on mixed material shipments, the recycler says, North American plastics recyclers need more warehouse space to accumulate enough material to ship cost effectively, which also increases their costs.

He adds that some Chinese ports, such as Shanghai, which is a transit port to the scrap processing zones of Nanjing and Tianjin, do not accept shipments of secondary plastics.

“Even with our own facilities in China, it is extremely difficult,” the recycler adds.

His company has tried shipping its secondary plastics to other countries in Asia, such as to Malaysia and India, as an alternative to China. But, he says, the freight time and cost associated with shipments to Malaysia are 50 percent greater than those to China.

“[We] tried India,” he adds, “but they are difficult to deal with.”

The recycler says he hopes the current export issues lead to investments in plastics recycling in North America. “There is lots of high-value engineering plastic still being generated, but most large companies’ quality standards prevent them from reusing scrap,” he says, citing Tier 1 automotive suppliers as an example. “Standards have to change to permit use locally.”
 


While Asian export markets still prove difficult, generation offers better news. The reprocessor based in the Midwest characterizes it as “steady,” adding that manufacturing has picked up after slowing down toward the end of 2013.

According to the Manufacturing ISM Report On Business, published by the Institute for Supply Management (ISM), economic activity in the manufacturing sector grew in January for the eighth consecutive month, and the overall economy grew for the 56th consecutive month.

Of the 18 manufacturing industries surveyed by the ISM, 11 report growth in January, with plastics and rubber products leading the way, followed by primary metals; textile mills; wood products; printing and related activities; fabricated metal products; electrical equipment, appliances and components; transportation equipment; machinery; furniture and related products; and food, beverage and tobacco products.

The ISM also finds that plastic resins and polypropylene (PP) resins increased in price in January; however, the price increases were not the result of supply shortages.

As well, the plastics and rubber products industries reported higher inventories for the month of January in addition to slower supply deliveries.

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