Slow going

When it comes to recycled plastics markets, it’s not unusual for the pace to slow to some degree as summer approaches. This year appears to be no exception.

“We see slight decreases in scrap generation, with some plants slowing down,” says a Midwest-based source with a recycling and compounding company that serves the entire U.S., with the exception of the West Coast. “Summer is typically a bit slower and a time for product line changeovers and plant shutdowns.”

However, a thermoplastics recycler based in the Southeast says generation has remained steady in the markets her company serves, particularly automotive, though a slowdown in auto sales in May have her concerned.

The Wall Street Journal, citing data from Autodata Corp., reports that Americans bought 1.54 million cars and light trucks in May. That is 6 percent fewer vehicles than in May 2015. According to the article, sales declined primarily because May had two fewer selling days; sales were up modestly when adjusted for seasonal factors.

“But other key measures fell [in May] compared with a year ago, including annualized sales pace and consumer purchases at dealers,” the Wall Street Journal reports. “That shift is fueling worries that demand in the world’s most profitable vehicle market has peaked.”

Despite slower overall generation of plastics scrap from the manufacturing sector, the Midwest-based source says the market is flooded with regrind and scrap because of reductions in demand in the domestic and export markets.

He adds that in niche markets where recycled materials are specified, domestic demand is soft. “Selling repro into this market is tough with prices for wide spec and prime [being] lower.”

Regarding overseas demand, the source based in the Midwest says, “We are exporting to China and India, and that activity has been slower, with lower pricing.”

He says overseas buyers also are being more selective.

“Selling repro into this market is tough with prices for wide spec and prime [being] lower.” – a recycler and compounder based in the Midwest

A number of plastic resins, including nylon and specialty engineering grades, such as acetal (used in high-load mechanical applications), PBT (polybutylene terephthalate, which is commonly used as an insulator in the electrical and electronics industries) and styrene, are seeing reduced demand, the source based in the Midwest says.

The Southeast-based source says some plastics used in the construction and agricultural sectors are doing OK currently, namely LDPE (low-density polyethylene) and high-density polyethylene (HDPE) fractional melt.

Interest in polypropylene (PP), however, has slowed compared with earlier in the year, the reprocessor says, adding that her company is getting “beaten up” on price when it can move this material. She says margins are getting “really skinny” on PP.

She says the lack of interest has arisen from a flood of imported material on the market.

The Midwest-based source also mentions that imports are creating issues. “We are seeing a flood of cheaper imported resins from overseas,” he says.

Looking on the bright side, he adds that this should help to lower freight rates for cargoes headed back to Asia.