Tight PET supply, rising prices

A Midwest-based bottle-to-bottle polyethylene terephthalate (PET) reprocessor says scrap supplies remain tight, with bale prices at record highs in early May. The rise in demand and prices is partly linked to mandates for recycled content in the European Union, she says.

“Currently, the European market is very tight, which is impacting all imports into the United States, as the product is diverted to Europe, where prices are higher than in the United States”, says the PET collector.

Despite record bale prices, she says her company has seen minimal improvements in bale performance.

Demand for recycled PET has pushed its price higher than that of virgin PET, according to the recycler, which is also at record highs.

“PET boomed, while PE/PP (polyethylene/polypropylene) held up well,” says a west coast-based thermoplastics recycler.

He adds that the availability of injection-grade high-density polyethylene (HDPE) has also tightened.

“There is concern that with inflation this high, at some point, demand for products will have to decline,” the source on the West Coast said. “Time will tell. I feel like when end users start thinking they can get cheaper hardware in the near future, they also buy less or only what they need to keep going.

In the meantime, he says, domestic demand remains healthy, with crushed and recycled pellets progressing well.

The limited supply is partly due to low collection rates in the United States. Most of the major categories of plastics recovered for recycling in 2020, for which the most recent year’s data is available, decreased from 2019, according to the “2020 US Post-consumer Plastic Recycling Data Report,” which was sponsored by the Association of Plastic Recyclers (APR), the Foundation for Plastic Recycling, The Recycling Partnership and the US Plastics Pact. Stina Inc., Sonoma, Calif., compiled the report based on surveys conducted by the company and the National Association for PET Container Resources (NAPCOR), Charlotte, North Carolina.

The recycling rate for PET bottles decreased by 1.2 percentage points in 2020 compared to 2019, reaching 27.1%, while the recycling rate for HDPE bottles fell by 2.1 percentage points to 28.8%.

“We need more supply,” Steve Alexander, president and CEO of the Washington-based APR, said in the press release announcing the report’s availability. “Our industry faces significant challenges that require immediate solutions. We need to focus our efforts on the technologies that are operational today. Mechanical recyclers have the capacity to process more materials but lack the supply to meet the current demand for post-consumer resin. Expanding and streamlining recycling collection programs, less confusion with labeling, and reducing contamination through design for recyclability should be key priorities.

Keefe Harrison, executive director of Recycling Partnership, Falls Church, Virginia, said the report “shows that we need investments in the U.S. recycling system to increase the rate of recycling for all materials, including plastics. . »

In addition to supply, transportation remains difficult to secure and prices are high, says the Midwest reprocessor, in part because of record fuel prices. “We are booking loads further in advance and paying more, although we are receiving a record number of inquiries from new freight providers.”

She says trucking in Canada is difficult to secure and costs two to three times more than it did six months ago.

“Bulk transport is much tighter,” explains the PET reprocessor.

The West Coast-based recycler says transportation issues have eased somewhat. “Rates are not as low as we would like,” he says, adding that availability has improved as “the blistering pace of demand on [the] the end of trucking has chilled some.

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