Lower Prices Expected
Some of softness is the result of pressure from sagging virgin prices. The economic outlook is a factor too.
Recycled resin prices rose in the first half, but industry sources say they have now passed their peak and should begin falling. Some softness comes from pressure from sagging virgin prices. Some also has to do with the continued poor economic outlook.
RPET: EAST VS. WEST
Last month, clear post-consumer RPET pellets were still up about 6¢/lb from January, but that gain really came in the first quarter. Flake prices are up about 7¢ since January, while green post-consumer pellets are up about 5¢. The real jump has been in green post-consumer flake, up about 14¢/lb.
On the East Coast, there is a big disconnect between demand for clear flake and the available supply. Said one pellet provider: “A lot of this demand is for bottles and thermoformed packaging, but there’s still a lot going into fiber due to the cotton shortage. Despite the downturn in prices for the overall market, I think top-quality post-consumer will remain in high demand.”
As reported in January, Clear Path Recycling delayed the second-phase expansion of its new recycling plant. “Availability would be crazier than it is if they went ahead with original plans,” one source said. “But it is still not as tight as it would be if Coca-Cola had not stopped buying. That tonnage stayed in the Northeast.”
In the last year, the Northeast has benefitted from new bottle-deposit laws in New York and Connecticut for water and iced tea. “We saw a big boost in material availability at the end of 2010 and beginning of 2011,” said one recycler.
West Coast prices went up in the last two months after falling earlier in the year. Bales were in the low 30s and now are in the 40s. One reprocessor said, “There is a lot of material available right now, but there is new demand from new U.S. plants and I expect that by the end of the year there will be less material available for China.” West Coast prices will then start to rise again.
HDPE DEMAND SLOWING
Recycled HDPE demand was strong early in the year and prices inched up, but midyear bale prices started to dip. “I suspect people are reacting to bad economic news,” one source said. “Demand is okay now, but everyone is concerned about the future.
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