|RECYCLED RESIN PRICES|
|PET Bottles (Clean)|
In recent months, virgin resin markets began to slacken in tandem with slower housing starts and automobile sales. While recycled resin markets were not affected immediately, they are now starting to feel the slowdown, at least in PET and HDPE.
Natural post-consumer HDPE prices have come down around 7¢/lb in the last three months, while mixed-color prices have dropped about 2¢/lb. Reprocessors say market conditions are the inverse of last year when demand was high and supplies were short. This year, demand fell short, resulting in oversupply of recycled material. One source says, “Pipe markets should be buying a lot more than they are. But I think it’s not only fewer housing starts, but an overall slowing of the economy.”
While sources interviewed do not expect a severe fall in recycled resin prices, they don’t predict a quick turnaround in demand either. Most reprocessors think prices will remain flat or fall a little bit more in the next couple of months.
Overcapacity seems to be the name of the game in PET as well. With virgin producers such as Wellman bringing on new capacity, PET recyclers are likely to feel the impact in the next year. Demand from China has also fallen off. Reclaimers report having “tons of bales” available. Despite a big drop in recycled PET prices this past spring, suppliers say pellet prices seem to have remained stable lately, while flake has fallen off a bit more.
Polystyrene seems to be following the same track as well. While some reprocessors haven’t seen much price movement in the last 60 to 90 days, others report that HIPS pellet prices have fallen about 4¢/lb. The good news for PS, however, is that we will be moving into the horticultural season soon, which should help keep demand somewhat steady, industry observers say.