Recycled plastics markets are feeling the chill of approaching winter and soft oil prices. West Texas Intermediate crude oil pricing as of late November stood just over $41 per barrel on the New York Mercantile Exchange, while Brent crude, the global oil benchmark, was just under $50 per barrel on London’s ICE Futures exchange.
Hope may be on the horizon, however, as Saudi Arabia’s cabinet said the country was willing to cooperate with other oil producers to maintain market stability. According to a Wall Street Journal article dated Nov. 23, 2015, “Some investors interpreted this as a sign that Saudi Arabia, the most influential member of the Organization of the Petroleum Exporting Countries (OPEC), may push the oil cartel to curb its output and stabilize prices.”
Many analysts, however, say they are skeptical that OPEC will diverge from its strategy of maintaining high output in an effort to retain its market share, the article reports.
“Plastic is correlated to oil, and oil [Nov. 20, 2015] fell below the Great Recession lows,” says an Ohio-based reprocessor of postindustrial plastics. “Couple this with weaker demand … and as ICIS recently said in its November newsletter, ‘It’s going to be a bloodbath,’” he continues, referring to the petrochemical market information provider with U.S. offices in Houston and New York.
Scrap generation is declining, which is to be expected during this time of year. The reprocessor says this typical decline is related to seasonality in the snack food industry and the typical winter slowdown in the building and construction sectors.
Domestic demand for recycled plastics also is declining across a number of polymers. “The rigid PVC (polyvinyl chloride) market has collapsed, and production scrap from seawall production has fallen to under 3 cents per pound,” the reprocessor says.
He adds that millions of pounds of PVC pipe scrap and regrind are available at prices last seen in January 2000, with no buyers.
“Window scrap is down several cents but is a high-value item and is still able to be sold with some effort,” the reprocessor adds.
LDPE (low-density polyethylene) film repro also is selling but at prices not seen in five years, he says.
While domestic demand and pricing are soft for a number of recycled plastics, some are maintaining their strength. The reprocessor says, “Polypropylene demand remains steady and is supported by a few unplanned outages at primary producers, though prices have fallen to a point where recyclers are having trouble moving lower grade materials at any price.”
Offshore markets are not fairing any better. “The China market is depressed, and what used to sell on open purchase orders to ship as ready now must be negotiated load by load,” the reprocessor says.
“Lower grade materials, such as bales of mixed engineering parts and purgings from automotive, are difficult if not impossible to sell,” he adds.
Exports to India have been affected negatively by the strong U.S. dollar and higher tariffs imposed by the Indian government in addition to weaker demand, the reprocessor adds.
Explore the December 2015 Issue
Check out more from this issue and find your next story to read.
Latest from Recycling Today
- Alumetal of Poland issues EPD
- Bolder Industries receives grant for European project
- Regenx says US facility back online
- Cliffs has money-losing Q3
- BIR Autumn 2024: Supply challenges poised to grow
- Befesa reports double-digit adjusted EBITDA growth in Q3
- Companies partner to standardize build of chemical recycling plants
- Solarcycle to add recycling plant to Georgia campus