Varied market conditions, uncertain future

The potential for tariffs to be imposed on goods from Canada and Mexico and the steady flow of cheap resin imports into the United States are creating a cloudy picture of what recycled plastics markets will look like as the year progresses.

In her recent report for the Plastics Division of the Brussels-based Bureau of International Recycling (BIR), Sally Houghton of The PET Recycling Corp. of California (formerly The Plastics Recycling Corp. of California) says conditions within the recycled resin markets are “varied.”

In addition to bales of Grade A polyethylene terephthalate (PET) reaching 18 cents per pound in some areas, Houghton writes that natural high-density polyethylene (HDPE) bales have continued their surge to an average of 70 cents per pound in early 2025. Mixed-color HDPE, however, has continued to struggle, with bale prices hovering around 10 cents per pound.

“The overall outlook for the plastics market remains uncertain owing to the potential impact of tariffs, which could significantly alter current dynamics.” – Sally Houghton, The PET Recycling Corp. of California

Tariffs could cause direct and indirect changes in the market if levied at the full 25 percent suggested by the Trump administration, according to Emily Friedman, a Houston-based senior recycled plastics editor for London-based commodities consulting firm ICIS.

Friedman notes the direct effect is the U.S. importing recycled plastic feedstock from its neighbors, which could lead to a fragmented impact based on who is buying that material. Additionally, she says some brands and converters might be assessing what higher prices would mean.

“They might consider switching to a domestic source or maybe switch to another international source that isn’t under threat,” Friedman says. “It could go either way, mostly based on cost pressure and how they decide to respond if these tariffs do come into effect at the full 25 percent.”

The U.S. is a major net exporter of virgin polyethylene, for example, and Friedman says retaliatory tariffs placed on the U.S. could indirectly cause the pile-up of excess resin domestically, placing more pressure on their recycled counterparts.

In her report, Houghton notes Mexico significantly has expanded its reclamation capacity, driving up PET bale prices for California-based reclaimers who already are competing with the influx of cheap resin imports. Tariffs potentially could change that.

“The overall outlook for the plastics market remains uncertain owing to the potential impact of tariffs, which could significantly alter current dynamics,” Houghton says. “California’s PET market may emerge as a winner, owing to its focus on circularity, although predicting outcomes is not easy. … Cheap resin imports are creating significant struggles for domestic reclaimers, indicating that 2025 could be another challenging year for the recycling industry.”