Time for a prime decline

Demand and pricing for recycled PET (polyethylene terephthalate) continue to be affected by the oversupply of prime resin on the market, according to sources. One source, whose Houston-based company processes and brokers recyclables and distributes recycled resins, says, “I’m surprised we didn’t see more movement upward in PET in April and May,” noting those months to be times of high demand, pushing pricing upward. Instead, he says, pricing for recycled PET remained flat, while virgin PET pricing increased slightly.

PET demand overseas and in the U.S. is weak in light of the oversupply of virgin material, which is currently selling at a discount to recycled PET, according to sources.

The source in the Southwest describes postconsumer generation of PET bottles as being “in good shape,” adding that it has increased slightly.

Other end-of-life plastic products are experiencing softening generation. A Midwest-based reprocessor/broker, whose company handles flexible packaging and rigid PVC (polyvinyl chloride) scrap, describes generation of these materials as “steady to declining.” However, he says these sectors typically slow down in the summer.

High-end grades of PVC are enjoying strong demand, the processor/broker says, while low grades are in weak demand because of M&A activity in the conduit and telecom space.

“Certain grades of flexible packaging scrap are very strong, especially polypro (polypropylene) material, due to limited availability of spot prime,” he says.

However, multilayer grades containing PET are weak domestically.
 

Outside of the U.S., demand from consumers in India is steady, the source in the Midwest says, though it is “being offset by the strong dollar.”

The Midwest-based broker/processor says, “There is general weakness in China,” adding that lower grade material is tough to sell but that clean material is moving well.

Bales of natural HDPE (high-density polyethylene) bottles are enjoying strong demand and pricing, according to the source in the Southwest. He says this material has gained 20 percent in pricing since the start of the year.

Regarding HDPE pricing, he predicts, “I think it will hold pretty steady.”

He adds that bales of colored HDPE are dropping in price in response to declining demand from the pipe and agriculture sectors.