Transportation issues slow movement

A plastics reprocessor and broker serving the U.S. Midwest, Northeast and Southeast says generation of plastic scrap from the commercial and industrial sectors has remained steady as the spring season advances, while he characterizes domestic demand as “steady to weak.”

Overseas markets are weaker still in large part because of the stronger U.S. dollar.

“India and China exports are both affected by the strong dollar and weak overseas markets,” the reprocessor says. The situation is more acute in China, he says, “where pricing has drifted down since October.”

Soft imports of finished goods from China also have had an effect on container availability, with the reprocessor saying containers are difficult to get in the Midwest.

Polyethylene terephthalate (PET) bottles likely will see an uptick in consumer generation during the summer months as beverage consumption increases with the temperature, a broker based in New York City says.

“PET virgin resin prices continue to hold down the curbside recycled baled PET pricing,” he says. “We are hoping to see some more positive numbers for generators soon as the depressed pricing of PET is hurting even the biggest generators.

“We are also right in the middle of LDPE (low-density polyethylene) ag film, irrigation tube and drip tape season,” the New York-based broker continues. “We are seeing the market heavily flooded with this material right now, and it will slowly be sold off for the remaining few months, depending on the China market.”

The broker predicts that HDPE (high-density polyethylene) pricing will cool off soon in response to slower demand from pipe manufacturers. “However, HDPE has seen a strong rise the past few months, recovering some pricing from earlier 2015 low numbers,” he adds.

Domestically, transportation issues are taking two primary forms. “Produce season has caused a spike in freight costs in the Southeast, and general economic conditions have caused a severe shortage of truck drivers, affecting pricing,” the reprocessor and broker says.

The New York-based broker adds, “Pricing to move material south is up significantly.”

In more encouraging news, the broker and reprocessor says the backlog of containers at the West Coast ports associated with the work slowdown of late 2014 and early 2015 that arose from a labor dispute is loosening, which will help to improve the flow of material.
 


He mentions a number of issues, however, that are affecting the movement and pricing of rigid PVC (polyvinyl chloride) scrap. “High-quality scrap is selling at premium pricing, but due to concerns over UL (United Laboratories) rating and product liability issues, purchasers of low-end scrap PVC, such as conduit makers, have all by stopped buying domestically,” the broker and reprocessor says.

“The Korean and Indian markets are weak due to the strong dollar, and that has caused only high-quality material to move at will,” he adds.

These issues occur as generation of PVC is poised to increase. The New York-based broker says PVC material in the form of siding and window profile scrap typically increases as home demolition and construction activity ramps up in the summer.

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