September/October 2019

Since the implementation of China’s National Sword policy, the US export market has all but disappeared and is finally accepting the new reality. There have been many in the wider industry that have stepped up and invested in providing a small but growing domestic market. However, lower-grade plastics continue to struggle and that has had an adverse effect on municipalities, several of which have cancelled or reduced their recycling collections. In California alone, 10 out of 93 material recovery facilities (MRFs) have shut down or merged with transfer stations in the last year.

At the same time, adverse public sentiment towards plastic has motivated several plastic bans; just recently, San Francisco Airport stopped the sale of bottled water.

Despite all the market difficulties, PET is still relatively strong, although the low virgin price - due to overproduction and imports of foreign feedstock for both virgin and rPET - is putting downward pressure on bale pricing.

HDPE and LDPE remain stable although, like PET, cheaper PCR from foreign sources is driving prices lower. Likewise, the PP bale market took a dive for the first time in six months. In fact, across-the-board prices for all post-consumer plastic bales have dropped by 20 to 40% as a result of the following factors:

•    Low-cost virgin resin
•    High inventory of virgin resin
•    Low-cost PCR feedstock
•    High volume of post-consumer plastic collected

On a positive note, the current conditions of low scrap prices and strong anti-plastic sentiment have incited virgin and consumer product companies to step up, either voluntarily or through public pressure. The investment in chemical recycling has grown greatly, and several virgin resin makers have bought into reclamation facilities to provide customers with PCR across their portfolio. There has also been investment in the capacity to process lower-grade plastic that in the past would have gone to Asia but now ends up in landfill. The hope is that these investment efforts will grow and provide outlets to relieve the current market pressures on post-consumer plastics.