Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
May 20, 2015 02:00 AM

Sustainability pledges help push recycling forward even as prices dip

Jim Johnson
Staff Writer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Jim Johnson
    Container lightweighting has also had an impact on plastics recycling numbers.

    These days plastics recycling shares something in common with Mark Twain, says the head of one group deeply involved in the industry.

    “The rumors of our demise are greatly exaggerated,” said Steve Alexander, executive director of the Association of Postconsumer Plastic Recyclers, despite the months-long trend of lower oil prices.

    His trade group likes to call itself “The Voice of Plastics Recycling” — that's a trademarked slogan, by the way — and Alexander certainly has plenty to say about the impact that virgin oil prices are having on the recycled plastics market.

    “We've been here before and we'll be here again,” Alexander said. “It doesn't have as big of an impact on the price [of recycled plastics] as people might think.

    “Obviously, we're feeling the pain. There's no question about it. The prices are down,” he said.

    But the recycled plastics market has forces other than just price, and that's helping keep the situation from completely deteriorating.

    Recycled content laws and sustainability commitments from companies are helping keep demand for recycled plastics in place at a time when virgin resin prices, thanks to lower oil prices, have fallen.

    The simple truth is this: price will be an important driver for some customers, there's no question about that. And the downward trend on virgin resin prices also has pushed recycled resin prices down as well.

    “The point that we're trying to make is it's not as gloomy as people might indicate. It's certainly an interesting time, But it's not unusual for plastic recyclers and the recycled plastics industry to face these,” Alexander said. “We've faced it before and we've survived.

    “We're concerned about a kneejerk reaction,” he said.

    Patty Moore is CEO of Moore Recycling Associates Inc., the Sonoma, Calif.-based recycling consulting firm that bears her name.

    She, like Alexander, has seen this before and believes the plastics reclamation industry is actually in pretty good shape, all things considered.

    Life is definitely tougher for plastics recyclers these days, she said, but not to the point of panic.

    Jessica Jordan

    “The plastics reclaimers, it's not like it's wonderful,” she said. “They are being squeezed because the price of virgin has come down and therefore they have to reduce their sales price.”

    The problem is that the price of baled recycled plastics they use as feedstock has not dropped quite as much thanks to continued demand.

    “Reclaimers are being squeezed, their margins are being squeezed,” she said. “And while they are not thrilled — it's not like they are happy — they are at least functioning and prepared to wait it out until something improves,” Moore said.

    “The reclaimer industry has seen these price squeezes before. It's not a wonderful time. None of them have told me we're in dire straits, which is not the case for the MRF industry,” she said.

    That segment of the business — which collects and separates all sorts of recyclables and then sells them off to plastic, metal and glass recycling specialists, for example, is having a much harder go of it right now, she said.

    Lower commodity prices across the board — not just with plastics — are exposing processing weaknesses at some material recycling facilities. These MRFs can afford to operate less efficiently when their end products — think bales of plastic or old corrugated containers or truckloads of glass — are selling for higher prices.

    Many of these sorting locations were engineered at a time when paper was a much larger portion of the recycling stream. But times are changing. Plastics are a growing constituency in the mix, and some of these locations are not designed specifically to take advantage of that opportunity.

    Lightweighting of plastic containers in recent years also means it takes more processing time at the MRF to create the same tonnage to sell to a plastic recycler. The growing popularity in the use of flexible plastic packaging also means that MRFs are being challenged to refine their processing to best capture that material and turn a profit.

    MRFs are accepting more and more types of materials, Moore said.

    “But the cost to process these materials have gone up,” she said.

    “We've had these shifts in materials and we haven't had commiserate shifts in how we deal with them end-of-life. That shift didn't occur because we've had these great scrap prices for a number of years now. We've been blessed with very high prices,” she said.

    But those times, at least for now, are in the rear view mirror. “What we have to do, we have to modify our systems,” she said about MRFs.

    A step up the recycling stream, where MRFs sell to plastic processors, things look better.

    “The plastic reclamation industry will muddle through this, especially if they can get support from their end markets,” Moore said. “I think plastics is well situated.”

    An important aspect of all this is that plastics represent the second most valuable material in the traditional recycling stream behind non-metals plastics. And that keeps people engaged.

    Recyclers prepared for lower prices

    Jessica Jordan

    “I think everybody knew this was going to happen and they prepared accordingly for 2015 to be a difficult year,” APR's Alexander said. “This whole gloom and doom that this is the demise of the recycled plastics industry couldn't be more wrong because there are continued demands for recycled plastics.

    “There's always been the demand there. Regardless of the price of oil, demand has always exceeded the supply of recycled resin. That's not changing at all,” he said.

    Moore indicated that there is a certain segment of customers who will switch from recycled resin to virgin resin when the price is right.

    “The responsible end-users are trying to help the reclaimers get through this difficult time by continuing to buy even though the price of recycled content may temporarily be above or at par with virgin material,” Moore said. “Not all of them, I want to say that, because we know that's not true.”

    Corporate sustainability goals, in some markets, do help support recycled plastic resin prices, said Scott Saunders, general manager of KW Plastics Recycling Division in Troy, Ala. But that certainly is not the case universally.

    “There's always a caveat that if it costs them money that they really don't go about it wholeheartedly,” he said about some recycled resin buyers.

    Managing pricing in the current downturn in pricing is no different than what his company does every day in a business that has tight profit margins, he said.

    While prices for what KW pays for raw material and what it can sell its finished product for have both declined, Saunders said demand has remained.

    That's a big difference from the trough that started in 2008 when both price and demand cratered for recycled plastics. There's been only one month that his company, which handles both polypropylene and polyethylene, has not been sold out in 2015.

    Saunders agreed that more pain is being felt at the MRF level where those operations are not receiving as much money for the baled materials they supply to plastic processors.

    With a close eye on incoming costs and outgoing prices, KW does not really have much room beyond those factors to maneuver, Saunders said. That's because the company already runs a tight ship without fat to cut.

    “Fortunately, our business is so competitive,” he said, “every day we have to look at our costs.”

    Despite the current bumps in the road, Alexander said he wanted to make a key point.

    “We're here to stay,” he said. “It's a strong, vibrant industry. It continues to attract more and more investment and capacity and technology and equipment.”

    A California law that requires at least 25 percent post-consumer content in rigid plastic packaging containers, Alexander said, is an example of once force beyond economics that helps the recycled plastic market.

    “The commitment to recycled plastics is not completely price driven. There are other factors involved,” he said.

    Consumer products companies that use such packaging are not going to make different containers just for California, so the law has the net effect of spreading that requirement beyond that state's borders, Alexander said.

    “Major companies, they don't just selectively package for California. They essentially look at North America as a region,” he said.

    Corporations that have embraced the use of recycled plastic in packaging also see value in continuing with the material even when pricing becomes difficult when compared to virgin resin.

    “You've got corporate commitments for sustainability projects and goals. You've got branding that's going on in terms of corporate brand companies that have committed to sustainability. You've got a lot of zero waste activity that's going on out there,” Alexander said.

    All of this leaves Alexander and his APR hopeful about the future despite the current bumps in the road.

    “I think we're extremely optimistic that 2016 is actually going to be an extremely profitable year for the industry. Because demand continues to rise. You are going to see the price differential mitigated a little bit,” he said.

     “You see companies making more and more commitments to utilizing PCR (postconsumer resin) every day. You've got major companies committed to enhancing recycling,” Alexander said. “That's not going away.”

    RECOMMENDED FOR YOU
    Australian startup Samsara to commercialize its enzyme recycling
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Top-dollar deals, repeat buyers highlight 2022 M&A
    2
    This is the year the reality of plastics EPR arrives in the US
    3
    Prices on the rise for PP, PVC
    4
    Auto supplier Seoyon E-Hwa to invest $76M, add 740 jobs in Georgia
    5
    Illinois AG sues 14 firms over PFAS contamination
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified