Both recyclers and processors are expecting higher prices for recycled resins this year. While prices were stable at press time last month, industry observers saw a firming of the market in anticipation of higher virgin resin tabs, which tend to pull recycled prices along in their wake.
After an autumn of strong demand, recycled HDPE prices took a dip in December and stayed down since then. That’s a normal scenario for recycled HDPE, processors say, and though prices are down, they are not as low as at the same time last year.
One processor says, “I think the virgin-resin price increases have put the focus back on recycled materials as offering an economic advantage.” Because the economy is still slow, a lot of high-end applications for recycle are gone, but low-end applications are strong, he says. The strongest market for recycled HDPE seems to be bottles. There might also be an uptick for mixed-color regrind prices because the pipe market is picking up.
The outlook for spring depends on virgin resin prices. Explains one recycler, “If virgin prices stick, we’ll see an increase, but not penny for penny. Last year, for example, virgin went up 11¢/lb. We may have gotten 2¢ of that for recycle.”
Recycled pellet and flake prices are flat so far. Rising virgin prices, pushed up 5¢/lb this quarter by soaring crude-oil tabs, will make recycled PET a more attractive buy.
An additional factor that could affect R-PET prices is the unexpected strong presence of Chinese buyers in the market. Usually they pull back before February, when the New Year’s celebration begins. “Typical prices are about 9¢/lb for bales delivered. But in some cases, the Asians are bidding prices up to 12¢/lb delivered,” said one recycler.
Virgin PS suppliers have continued to announce price hikes almost every month. At least 3¢/lb has been implemented so far this year. One recycler expects that virgin increase to take a few months to trickle down to recycled resin prices. By April 1 there is likely to be an increase for R-PS.