PET and HDPE recyclers continue to be troubled by bale quality, low yields and challenges related to recycled resin prices and demand.
Roughly 75 percent of high density polyethylene reclaimers and roughly two-thirds of PET reclaimers said the quality of materials they had received declined in 2009, according to the fourth annual survey conducted by Plastics Recycling Update newletter. Not one reclaimer surveyed said material quality had improved.
PET reclaimers said their yields were only 73.1 percent in 2009, down 10 percentage points since 2007. Similarly, 51 percent of HDPE reclaimers said the level of contaminated resin in 2009 had risen, according to the survey results, which were presented last month at Plastics Recycling 2010 in Austin.
However, there were some clear differences between how PET and HDPE recyclers fared in 2009.
While PET capacity utilization was in the low 70s, down from the low 90s in 2007, HDPE capacity utilization was at an all-time high of 87 percent. And while 50 percent of HDPE reclaimers said it was harder to secure baled bottles in 2009, two-thirds of PET reclaimers said it was easier.
In addition, 40 percent of HDPE reclaimers said their volumes increased in 2009 and 40 percent said volumes were down; while 53.8 percent of PET reclaimers said volumes increased in 2009 and only 15.4 percent said volumes declined.
In general, recyclers were optimistic about the opportunities to sell recycled resin into the food and beverage, film and sheet and non-food segments. Fiber and strapping markets also were consistently listed as a strong growth market although by slightly fewer companies than the year before, said Henry Leineweber, associate editor of Resource Recycling magazine, who presented the data.
Resource Recycling and Plastics Recycling Update are affiliated publications based in Portland, Ore.
Not surprisingly, 71.4 percent of PET reclaimers, 60 percent of HDPE reclaimers and 65.2 percent of all other reclaimers said market conditions in 2009 were worse than the year before, contributing to an across-the-board drop of 10 percent in operating margins, Leineweber said.
Recyclers said the largest barriers to growth were material contamination, bale costs, increased competition, and recycled resin prices and demand including the prices of virgin material compared with recycled resins.
They also said light-weighting in response to sustainability initiatives had reduced the amount of PET used to make bottles by 5.6 percent and the amount of HDPE used by 8.6 percent.
To compensate for market conditions, 80 percent of PET and HDPE reclaimers made investments to become more efficient, and 55-60 percent sought new end markets. More than 70 percent of PET reclaimers sought new sources of supply, but only 40 percent of HDPE reclaimers did so.
PET and HDPE reclaimers unanimously agreed that better collection needs to the top future industry agendas, followed by consumer education and legislative advocacy.
Some 86 percent of PET reclaimers, 60 percent of HDPE reclaimers and 72 percent of all others said they support container-deposit legislation. There was less agreement, however, on single-stream recycling, with 80 percent of HDPE, 43 percent of PET and 61 percent of all other reclaimers in support of it.
Nearly 29 percent of PET and HDPE reclaimers said they recycled polyethylene film and wrap; 28 percent, non-bottle rigid plastics; 7.1 percent, electronics-related plastic; and 35.7 percent, plastics with resin identification codes of 3-7.
More than two-dozen PET and HDPE recyclers and more than 90 reclaimers of all types of plastics resins were surveyed for the report, with additional data provided by the Washington-based Association of Postconsumer Plastic Recyclers and the National Association for PET Container Resources in Sonoma, Calif.
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