The scrap keeps coming

Generation of postindustrial and postconsumer plastic scrap remains healthy, contacts in the industry say.

“There is a lot of material out there,” says a source based in the Southeast who handles postindustrial material, particularly from the packaging sector. “The economy is doing well, and people are producing scrap,” she says.

A Midwest-based broker who handles postindustrial plastic scrap characterizes generation as steady to increasing as of mid-August. That coupled with a lack of export demand has created more domestic supply, he adds.

That supply wasn’t necessarily greeted with enthusiastic demand, however. Within the U.S., demand was somewhat softer than expected in July, the Southeast-based source says. “People were waiting on prices and ordering when they needed it.”

However, as of mid-August, she says demand is “about what you would expect.”

She predicts increased demand for commodity-grade recycled plastics heading into the fall, particularly as manufacturers prepare for the holidays.

The broker in the Midwest, however, says he is “anticipating lower scrap prices come September through the end of the year” as a result of excess supply on the domestic market.

Regarding export, the source in the Southeast says Europe is the primary destination for her company’s material, adding that it is “very competitive” with the domestic market.

She says the Central American market also is helping to offset some of the decline in demand seen from China and Southeast Asian countries.

The broker based in the Midwest says with shipping costs, tariffs and regulations, exporting to China, Malaysia, Vietnam, Taiwan and Thailand is all but dead. However, he adds that his company does some sporadic business in China and Southeast Asia.

A material recovery facility (MRF) operator based in the Northeast says his company has been exporting its postconsumer material to India, Korea and other parts of Asia.

“The economy is doing well, and people are producing scrap.” – a source based in the Southeast

“HD (high-density polyethylene), PET (polyethylene terephthalate) and PP (polypropylene) have been strong grades domestically both from a demand standpoint and a pricing standpoint,” he says.

However, an excess of low-density polyethylene (LDPE) scrap has suppressed pricing for this material, the source in the Southeast says. She says the vertical integration in this sector is a possible contributing factor as well as China’s scrap import restrictions.

Recyclers say they still are contending with transportation difficulties.

The MRF operator says long-haul trucking remains a challenge in light of the driver shortage, which also has contributed to increasing freight rates.

The broker in the Midwest says trucking is getting “more and more expensive.” He adds that it is also “harder to get materials farther away.”

Ocean shipping has been no easier. The MRF operator says he’s encountered tightness on container ships as well as rising prices.