Lower Prices for Recycled Resins: A Mixed Blessing?
Plunging oil prices are helping recycle buyers now, but could hurt later on.
As reported this month by Contributing Editor Debbie Galante Block, prices for recycled resins are down sharply across the board, as a result of plunging oil prices and the resulting decline in prices of chemical feedstocks and virgin resins. Good news for resin buyers? Yes, in the short term. But, as Debbie’s sources note, a prolonged slump in recycle prices is apt to depress efforts at collecting plastic waste for recycling. The year 2014 proved to be a “so-so” year for recycled material markets, with maybe a bit of a bright spot in PP. While recycled resin prices were up and down, the oil-price slide at the end of the year almost immediately affected recycled resin pricing as well. While that may be good news for processors, who can now get virgin materials for the same prices as recycled materials, the environmentally conscious resin buyer may suffer in the end, as lower prices affect enthusiasm for collecting materials to be recycled. As one recycler puts it, “Why recycle HDPE if virgin prices are equal?”
In the case of recycled PP, the return to earth of formerly stratospheric prices is a source of optimism for at least one recycler. “Natural bales were at 57¢, now they are at 35¢. That’s only in five weeks,” this source commented.”I think it will be a healthier market, once there is a price adjustment. I like it when prices are more realistic.”
Much of the growth in recycled PP is coming from Walmart’s call for recycled materials in its products. Much R-PP is generated from yogurt containers, apple-juice bottles, etc. Because of Walmart’s interest, “We are able to spark growth in collection,” says one reprocessor. “That’s how the cap and lid market was developed. It’s exciting to see the whole supply chain working for a common goal and seeing results.”