The outlook for recycled plastics markets in 1996 appears as unclear as a bale of mixed bottles. The year saw increased use of post-consumer plastics, which reached record proportions. Prices for flake and repelletized post-consumer plastics reached near virgin levels.
But some industry experts are concerned that the bubble will be burst by the ``two C's'' - collection, and consistency of supply and material quality.
Post-consumer high density polyethylene and PET continued to lead the pack of commodity recycled resins last year, buoyed by significant use of HDPE in packaging and of PET in fiber and packaging applications.
In 1995, post-consumer HDPE appeared ready to break into food packaging, a potential windfall for recyclers who have been limited to markets for personal-care, household chemicals and motor oil packaging, plus drain pipe and plastic lumber. Union Carbide Corp., for example, received a letter of nonobjection from the Food and Drug Administration for use of its post-consumer HDPE in multilayer containers.
Food-contact approval already has been granted for a variety of recycled PET suppliers in selected applications.
In the latter half of the year, however, prices flagged for post-consumer PET and HDPE flake due to abrupt drops in use in the fiber markets, and price declines for their virgin counterparts.
Still, industry insiders look to continued growth in demand for HDPE and PET recycled resins. They said that use will depend on greater collection at the consumer level and increased consistency in processed scrap products.
``We think that collection in the post-consumer markets, especially for HDPE and PET, have hit a plastic ceiling,'' said a representative of a major HDPE recycler and packaging maker.
``We see a definite connection between decreases in the virgin prices and decreases in the price for recycled HDPE. It is reasonable to assume that not as much curbside HDPE will be collected if the collectors see that they cannot get as much money for it.''
Larry Koester, vice president of marketing and sales for Pure Tech International Inc., a Ridgefield, N.J.-based recycler of plastic and other materials, said he expects prices for recycled fiber-grade PET to slip a small amount, based on a soft fiber market.
The demand for Pure Tech's products for the bottle and sheet markets remains good, he said in a telephone interview.
``The supply of bottles is seasonally off 25-30 percent. The fiber market is seeing a significant dropoff in demand and fiber prices - tied, apparently to poor consumer purchasing of apparel and the availability of wide-specification virgin PET being sold into the fiber market,'' he said.
He added that he also expects prices for recycled polypropylene to continue to slide slowly for the first few months of the year.
Wellman Inc. of Shrewsbury, N.J., the largest PET recycler, issued a study in 1995 of the outlook for PET through the end of the century. The report similarly cited collection as the most important factor in continued growth.
The study echoed others' opinion that packaging and other end-use demand for PET regrind will continue to grow as beverage and other industries move to increase sales around the world. However, it noted that growth in high-speed markets such as the Far East and South America could be slowed by the supply of post-consumermaterial. The study calls for a wide-ranging program to develop collection systems, and for technological advances to make the collection and separation of materials more economical to boost supplies.
One official of a large PET recycler, who asked not to be identified, said the price for flake and repelletized PET was expected to fall early this year due to soft demand in the fiber market. The lower cost of virgin PET has made it attractive again in making polyester fiber.
``The demand is still fairly well-balanced with supply,'' he said, ``but the driver in the packaging market in particular is economics, and with virgin and off-spec PET prices in the 60s and 70s [cents per pound], customers might be reluctant to place orders for regrind.''
Prices for other commodity post-industrial and post-consumer resins also slipped slightly in the latter half of 1995, although demand for regrind PP has continued to be strong. Softness in the housing and construction field have contributed to lack of growth in the use of recycled PVC and some other materials, which observers think may last into the new year.
A major development in 1995 for the plastics recycling industry was the creation of a trading system for recycled goods, including HDPE and PET, by the Chicago Board of Trade.
Pat Videll, project coordinator for the board, said part of CBOT's intent in offering cash trading for the commodities was to establish much-needed quality criteria on the recycled products, which can be very inconsistent.
While the recycling of engineering grades of plastic is not as prevalent as the commodity or packaging resins, technological advances are leading more recyclers into the field.
Al Maten, chairman of the durables recycling division of the American Plastics Council, said projects like the durables recycling center at wTe Corp. located in Dorchester, Mass., have proven that it is feasible to recycle engineering-grade plastics such as those used in auto parts, appliances and business equipment.
If collection and identification can be perfected, this recycling could become more widespread, he said.