Strong numbers

Markets for many secondary plastics remain strong as North America transitions into autumn, with sources noting that polypropylene (PP) and polyethylene (PE) are among the standouts right now. A reprocessor with operations in the East and Midwest and a broker based in the Midwest both attribute this market strength to growing demand related to higher prime material pricing.

A reprocessor with operations in the Midwest as well as in South Carolina and Arizona adds that TPE (thermoplastic elastomer) plastics and styrenes also are “on the upswing.”

He characterizes generation from the auto and medical industries as increasing.

A broker serving material recovery facilities (MRFs) primarily on the East Coast and in the Midwest says, “Generation seems to be holding steady from the plants we work with. During the colder months, some generation slows down until springtime,” he says, referencing the PET (polyethylene terephthalate) and HDPE (high-density polyethylene) grades most commonly processed by MRFs in the U.S. “Currently, we are seeing about industry average generation from our plants.”

The broker says pricing for PET is “leveling out, with possibly a slight increase for September. Generators are looking to push PET pricing higher for October, but end users/mills are not 100 percent confident a price increase is warranted due to bale yields and virgin resin pricing squeezing margins.”

He continues, “PET loads headed to big end users in the Carolinas, and the South in general, are also experiencing push-back on rates and capacity from freight companies due to produce season being over.”

Regarding HDPE, he says its “hot streak” continues, noting that demand for mixed color and clear/natural HDPE remains high. “Supply continues to struggle in this commodity,” he says. “Many generators are holding out on selling more than a few loads at a time to increase their margins through market shifts.”

The reprocessor with operations in the Midwest, South Carolina and Arizona says the export market has picked up for his company. “We are shipping out more containers, but the buyers are inspecting the materials at our docks before they ship.”
 

However, he adds, overseas containers are harder to find.

Plastics recyclers also are encountering difficulties when shipping by truck, with the reprocessor saying, “Trucks are getting hard to find to make long hauls.” He adds, “Freight in the South is more expensive as fruit season is over.”

The broker serving clients in the Midwest and East also has been experiencing issues with trucking. “With produce season ending, we are seeing rates going up and capacity being tighter. OTR (over-the-road) drivers are pushing back on heading south. This creates a unique market condition that sometimes generators and end users do not factor into the equation.”

The reprocessor serving the East and Midwest adds that freight costs tend to “skyrocket the last week of each month.” He calls this pattern a sign of a healthy economy.