Page 78 - Plastics News May 2024

IN THE NEWS

which Friedman called “sustainability- pricing reports. year, highlighting how plastics recy-
driven recycled resins,” are the post- This pricing dynamic has become cling has become a global industry,
consumer, typically clear, resins. something of a cyclic trend, Friedman Friedman added.
Rather than being tied directly to the said: As demand rises for recycled The imported material, which can be in
virgin market, the pricing equation for resin, prices increase alongside it, until the form of bottles, flake or pellets, is
this PCR is based on the feedstock they reach a point where the premium cost-competitive with U.S.-generated
cost, Friedman added. So, PCR prices is unsustainable. Then, “the market recycled plastic, she added. Overseas
reflect plastic bale prices and the cost crashes and we start back over again.” recycling operations sometimes have
to process the material. The trend is particularly visible in the lower labor costs, and with freight
“Oftentimes from feedstock through recycled natural HDPE space, where rates trending downward, imported
production, the washing, the grinding, collection is steady – “We’re not drink- scrap can even go for lower than U.S.
the extruding, that’s going to put your ing any more milk than we were 10 material.
price higher than what we see in crude- years ago,” Friedman said, meaning “So now not only do recycled resin
based or natgas-based virgin plastic,” the supply from products like recycled prices need to compete with virgin
Friedman said. milk jugs is fairly tight – and yet the re- counterparts to some degree, you also
But that creates pressure on the recy- sulting clear recycled resin is in grow- need to be looking at import competi-
cling sector, because there are limits ing demand from brand owners. tion as well,” Friedman said.
on how much of a premium recycled She added that after the recycled HDPE The PET imports in 2023 came pre-
resin producers can charge and have price crash last fall, there are signs of dominantly from Asia, but volumes
the market bear it. the cycle beginning again. also came from Latin America and Af-
rica. And Friedman hinted that Europe
“At the end of the day, the converter, “We’re kind of in the rebuilding phase
the brand company and then us as of this market,” Friedman said. “Do I could become another competitor.
consumers aren’t willing to uphold expect supply will remain tight? Yes. “I do hear in conversation that players
that,” Friedman said. Do I expect demand will continue to in- in Europe are looking, is there oppor-

That came to a head recently with re- crease? Yes. So I think we’re on track tunity in the U.S.,” she said. “If Euro-
cycled HDPE prices: At its height in the to continue that cyclic pattern.” pean markets are weaker, can we send
summer of 2023, post-consumer natu- As one indicator of that cycle begin- it here to the U.S.?”
ral HDPE was selling for nearly double ning again, natural HDPE bale prices PET imports have hit particularly hard
what virgin HDPE cost. The recycled have been slowly creeping up since in California, where reclaimers are
resin was trading for 120 cents per last fall and reached nearly 31 cents pushing for financial assistance from
pound, compared to about 60 cents per pound last month. the California Department of Resourc-
per pound for virgin resin, according es, Recycling and Recovery, or Cal-
to ICIS data. PET imports add new pressure Recycle, the state’s recycling agency,
“At that point, we saw a significant Friedman also touched on a major to offset the impact to PET processors
withdrawal of demand, which then trend in the PET space: Plastics recy- and to better incentivize manufacturers
caused pricing to crash, so that pre- cling companies are facing rising com- to use domestically-sourced RPET.
mium came down to more historic lev- petition from imports of recycled plas- Reclaimers in California are facing
els,” Friedman said. tic, which play into the prices domestic additional pressure buying bales, be-
reclaimers can charge. cause reclaimers in Mexico are in-
Recycled HDPE bale prices followed
suit: Natural HDPE bales fell from “We are really feeling that here in the creasingly competing to buy California
about 75 cents per pound in May 2023 U.S. market, particularly in the PET bales, driving up the bale prices.
down to 23 cents per pound in August, space,” Friedman said. Recovered PET Source - PLASTICS RECYCLING UP-
according to RecyclingMarkets.net imports into the U.S. shot up 33% last DATE

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