Gaining momentum

Markets for secondary plastics are gaining momentum after a slow start to the year owed largely to the extreme winter weather, according to a material recovery facility (MRF) operator in the Midwest. “Weather had a big impact the first two months of the year, reducing generation and also stalling some purchases,” he says.

“Most grades are coming in as expected currently, although PET (polyethylene terephthalate) generation seems to be lower than in past years,” the MRF operator adds.

He characterizes demand for most grades as “good,” adding that it is starting to waver slightly for colored PET and HDPE (high-density polyethylene). However, the MRF operator adds that this is not unusual.

“Color HDPE is used for making pipe for drainage at farms, and this activity is slowing,” he continues.

Natural HDPE is faring better, however, which is to be expected. “Natural HDPE is a hot commodity,” the MRF operator adds.

Pricing for recycled PET (rPET) exceeded that of prime material in April, he continues, adding that prices for rPET are likely to decrease this spring and summer because of increased supply.

In terms of export buying activity, the MRF operator says numerous Asian countries, such as China, Indonesia, South Korea, Malaysia and Vietnam, were purchasing material as of late May.

Additionally, he says, buyers for overseas interests have been sourcing mixed grades of recovered plastics from the U.S., which has been an infrequent occurrence since the Chinese central government instituted Operation Green Fence in early 2013.
 

Obtaining containers for these overseas shipments was not necessarily an easy task during the first quarter of the year, however. “Containers were problematic in the first four months,” the MRF operator says, “primarily due to a lack of chassis for drayage.”

He continues, “The chassis situation at [container yards] and ports is a mess and has impacted our ability to export.”

Fortunately, the Midwest-based MRF operator says the chassis and container situation is “slowly” improving.

Weather issues also had a negative effect on trucking in the first quarter of the year, with the MRF operator characterizing this form of transportation as “expensive and slow.”