A number of post-consumer plastics are enjoying robust demand, which is helping to keep prices rising. In particular, bales made of high-density polyethylene (HDPE) and polypropylene (PP) and repro have benefited from the tightness of the new goods.
This year record prices were achieved for natural and mixed-color HDPE bales. From the first quarter of next year, however, the tension in Neumarkt should ease. One remanufacturer also says he saw brand owners push back rising prices for recycled materials.
Joel Morales, Executive Director of Polyolefins Americas at Houston-based IHS Markit, says that planned and unplanned outages since the winter storms in February of this year have continued to keep the supply of virgin HDPE, especially for blow molding types, tight. Morales says more planned outages will follow in the fourth quarter.
However, new HDPE virgin material capacities for the blow molding sector will be put into operation next year, which should improve the supply of this material and also lower prices, he says. Morales mentions LyondellBasell’s expansion in La Porte, Texas, which started operations in early 2020 but is still in the process of optimizing blow mold production. This facility should be able to support the market in 2022 with a capacity expansion of 1.1 billion pounds per year. Shell Pennsylvania Petrochemicals Complex in Monaca, Pennsylvania, is also scheduled to go online in mid-2022, producing 1 million tons of HDPE resins with a focus on blow molding applications.
Scott Saunders, general manager of KW Plastics, Troy, Alabama, an HDPE and PP remanufacturer, says HDPE prices showed signs of weakness prior to Hurricane Ida, which hit land in late August, as more new HDPE was carried wider specification became available. He says the availability of this material threatens to lower the price of mixed bales.
“Domestic demand is spectacular for traditional varieties and developing for non-traditional ones. If it is a polyolefin, markets can be found. Even some mixed grades of material are being studied due to their low prices compared to more traditional materials. Demand is being driven by more and more companies who want to show that they have post-consumer content in their products. ” – an operator of material recycling plants based in the Midwest
Saunders adds, “That seems a bit dried up, or at least has been postponed to October.”
Despite this delay, he says, “We are seeing that high density has peaked and should begin to decline, which will affect the color market. We don’t yet know how this will affect the natural market. “
Saunders continues, “We hear some comments from brand owners who are dissatisfied with the price premium for PCR (post-consumer recycling) over virgin material, as they have come under cost pressures from all of their other chemical and raw material suppliers.”
The availability of PP scrap is increasing, he says, and bale prices have decreased somewhat in response, but new supplies of this material still appear to be scarce.
A contact with a post-industrial scrap remanufacturer based in the southeast says: “Although we have seen a steady flow [of scrap], with some downtime in the automotive industry due to missing components, work issues, etc. I would expect a slight decrease in material receipts by September, with a recovery in October. “
She adds that the demand for recycled PP, HDPE, polyvinyl chloride, acrylonitrile butadiene styrene (ABS) and polycarbonate / ABS grades from her company has been strong. “Demand for consumer products and the expansion of recycled content commitments have remained high and strong throughout the year. Every end user we have can use more than we produce. “
The remanufacturer adds that demand is at least 15 to 20 percent higher than her company’s production capacity allows.
“The trend for 2021 is up,” she says. “I think the companies that have committed to using a percentage of recycled material [content] by 2025 set up their processes and raw materials for this. I think both prices and demand will stay strong through 2021. “
A contact with a material recovery plant in the Midwest that processes post-consumer and post-industrial material says that in addition to the high prices for HDPE bales in natural and mixed colors, so are the prices for bales made from expanded polystyrene, polyethylene terephthalate, polyethylene Apply to low density, polycarbonate and ABS is strong.
“Domestic demand is spectacular for traditional varieties and developing for non-traditional ones,” he says. “If it’s a polyolefin, markets can be found. Even some mixed grades of material are being studied due to their low prices compared to more traditional materials. Demand is being driven by more and more companies who want to show that they have post-consumer content in their products. “