‘Correction year’ reaches its halfway point

Research recently conducted by the tandem of Berkeley, California-based nonprofit As You Sow and environmental solutions platform Ubuntoo revealed a significant gap between global companies’ stated plastic reduction commitments and their actions.

The 2024 PlasticsPromises Scorecard ranked 225 companies across 15 industries based on their ambition and actions to reduce plastic packaging pollution, judging them on six categories including recyclability goals, virgin plastic reduction and use of recycled content, among others. The results could be viewed as troubling for recycled resin markets that have spent this year contending with cheap and abundant virgin material.

In terms of recyclability, for example, the report found that only 22 of 147 companies with stated goals are on track to meet their targets, largely because of packaging that fails to align with what consumers are able to place in their curbside bins. The research also reveals that 145 companies have goals to utilize more recycled content in their packaging, but notes there is not enough recycled content supply to meet demand due to “a lack of corporate investments in packaging collection and recycling.”

A recycler based in the Southeast who works with polypropylene (PP) and high-density polyethylene (HDPE) says the market is relatively weaker at this year’s midway point than it was in June 2023 and much weaker than in the stretch from 2020-2022, when pricing soared. In line with the Plastics Promises Scorecard report, companies’ continued use of low-cost virgin material in their packaging and products has hurt recycled content markets.

“I think it’s just a correction year, and once people feel like the virgin resin’s found the [pricing] bottom and you’re not going to see big depreciations in the value, you’ll probably see some of the marketplace kind of come back,” he says. “A lot of people that buy recycled material only for cost savings have flipped back to virgin now because they’re able to buy it cheaper.”

As of mid-June, the recycler notes that the market for his resins is a bit slow because of virgin pricing, and a squeeze on mixed-color HDPE bales led to decreased demand. “For us, we’re seeing some relief in that bale price now, but it needs to come down 8 [cents] or 10 cents a pound to have a flowing marketplace, based on what we’re seeing on these prices.”

He notes PP has achieved a balance, but a recent drop in virgin pricing led buyers to take a “wait and see attitude,” holding off on buying pounds they don’t immediately need in the event prices drop further.

Lee Cornell, commodity sales manager at Omaha, Nebraska-based FirstStar Recycling, which operates a material recovery facility (MRF), says markets this year have been steady but lack the “rabid purchasing” seen over the previous two years. Instead, he says the trend has been for modest increases in bale pricing. As of mid-June, bales of polyethylene terephthalate (PET) were selling for about 17 cents per pound; natural HDPE was 38 cents per pound; mixed-color HDPE was 22 cents per pound; and PP was 10 cents per pound.

He says domestic demand is “good, but not desperate,” and most tons have moved easily amid modest price increases. However, PET generation has seemed to slow in the Midwest.

“It’s been a wet spring so far, and that may curtail some consumption,” Cornell says. “Other grades, including HDPE, PP, LDPE [low-density polyethylene], PVC [polyvinyl chloride], TPO [thermoplastic olefin] and engineering grades all seem to be normal.”