End-of-the-Year Hush

“Everything is a little slow,” a MRF operator based in the Midwest says of secondary commodity markets in general and of secondary plastics in particular as 2012 nears its end.

He predicts that secondary plastics will remain soft through the end of the year, however, he says he does not foresee additional declines in pricing.

A plastics reprocessor based in the Great Lakes region characterizes scrap generation as increasing, particularly in the nonautomotive sector, as of mid-November.

“We think that increase is attributed to year-end production needs and new programs that start in January 2013,” the recycler of engineering thermoplastics says.

Demand for these engineering-grade plastics is rising as well, he says, which is ensuring that material keeps moving.

When it comes to transporting material, the reprocessor says, “We are seeing more competitive rates for trucking than we saw in the summer. Lower gas prices have been a factor, but I also think they are seeing an increase in activity and credit is loosening up.”

The MRF operator says his company has seen some softening in fuel surcharges imposed by trucking firms.

The availability of containers for offshore shipments has not been an issue in the Midwest, he says, though he adds that the cost of containers is still high.

The MRF operator says his company is looking for additional ways it can add value to the plastics it handles, which can mean adapting the company’s sorting techniques to focus on capturing material that is in high demand.

Currently, his company is not sorting colored HDPE (high-density polyethylene) from natural HDPE because the price differential of 10 cents per pound does not justify investing the additional labor. By creating 50/50 bales, his company is able to make a bit more on the colored HDPE without losing a great deal on the natural, he adds.

“PET seems to be the dog right now,” the MRF operator says. “It’s a complete 180 from where were in the mid- to late spring of 2012.”

He says PET is selling for roughly 12 cents per pound in his region, down from 35 cents in the spring of 2011. However, the MRF operator adds that he believes PET could double or even triple in price from the current rate in 2013. “When is the magic question.”

He attributes the softness in PET to the quieter Chinese market, which has ramped up inspections of recyclables headed into the country, and to the rebound in cotton production, which has lessened demand for polyester fiber.

(Additional information about secondary plastics, including breaking news and consuming industry reports, is available at www.RecyclingToday.com.)