Prices for recycled resins may rise through 2024

Grapevine, Texas — Recycled resin prices that have struggled against low prices for virgin materials may be on the path to recover in 2024.

Emily Friedman, senior market editor at ICIS, pointed to a few key trends affecting recycled resin pricing during the recent Plastics Recycling Conference 2024 in Grapevine.

Lower virgin resin prices have meant lower prices for recycled resins because there is less demand for them.

Now global trade also is making a difference on recycled material.

"Not only do recycled resin prices need to compete with virgin counterparts to some degree, but you also need to be looking at import competition as well," Friedman said.

"Often times, through feedstock and production, the washing, the drying, the extruding that's going to put your price higher than what we see through virgin plastic," she added.

Recyclers and processors also should expect seasonal trends in pricing and availability of resins. PET, polypropylene and high density polyethylene are often used in beverages and snack packaging more commonly used in the summer. More thermoformed clamshells are used for summer fruit while the construction industry does most of its projects during warmer months.

"At the end of the winter, into the spring when supply tends to be a little bit tighter, we also are trying to prepare for that next beverage season so demand for rPET and for PET is picking up," Friedman said. "So February, March you tend to see some stronger pricing moves, because supply is tight and demand is picking up."

But Friedman said the seasonal trends have not been as strong recently.

Recycled PET prices have rose in the beginning of 2024, but are expected to stay about the same right for a few months before potentially increasing in the second half of the year.

In 2023, recycled PET saw a dip in prices during the beginning of the year, then rose slightly in the second half.

"Through the year, the demand is looking relatively flat. ... I don't see any significant changes in that market for the summer period," Friedman said. "The West Coast is looking at very intense export competition, which is driving up prices and intense import competition, that is capping what they can sell."

In 2023, recycled polypropylene was experiencing a lack of demand and dropping prices. By the third quarter of 2023, prices began to rise and are expected to continue to do so throughout 2024.

There has become less wide-spec virgin PP available, allowing for recycled PP to start to recover from the drops in demand.

"Prices are fairly low, we are hoping that it is going to increase as the year goes on," said a material supplier in New Jersey in discussion with PN. "We've seen in the last couple weeks some polypropylene movement in the right direction, for us. It's slowing rising and I think will continue as the year goes on."

Some materials, such as recycled HDPE, are in a rebuilding stage and still recovering from a surplus of material being available throughout 2023 after a strong demand that happened in the end of 2022 and beginning of 2023.

Demand for recycled HDPE is increasing, though, leading to higher prices for 2024.

"We're not drinking any more milk than we were 10 years ago, so those natural milk jugs, the starting point for those resins, the supply is tight but yet demand is increasing as consumer brand companies start up more programs to use that recycled resin," Friedman said. "What we tend to see now in the industry is a cycle of trends that demand is increasing, pricing will continue to increase until that premium is unsustainable."

The demand for low density PE in 2024 is going to be the leading cause of the increase of recycled resin prices.

"Demand is increasing exponentially, we should be close to doubling our output now on finished goods," said a recycler from California. "I think that's going to have a effect on raw materials of bales, so there will be a slight increase this year."

Recycled LDPE pellet prices decreased throughout the second half of 2023, and sources were already starting to anticipate a higher price in 2024, with predictions of about a 10 percent rise.

"2024 is going to be steady in the first half, which we are partly through right now, but then in the second half it is going to increase," the source added.

Prices for virgin linear LDPE is lower than for recycled LLDPE right now, so demand has been very low. Prices for recycled LLDPE have been stable for a while now, and sources are not expecting them to move.

"For the last 11 months, the price has been stable," sources told PN. "I don't see the price moving for right now. We can't compete with the virgin material, and customers don't want to pay more for PCR compared to virgin material."

Recycled polycarbonate is not anticipating a large increase through the end of 2024; sources estimate it could move less than 5 cents within the year.

"It's much better than 2023, we bottomed out and we are on the way up," said a compounder in the Southeast. "Major resin producers have put out price increases, whether it's availability of raw materials or the market justification, it's definitely heading in the right direction."

Recycled polystyrene is looking like it might increase sometime in 2024, but demand just started to pick back up after a surplus. Any changes would happen later in 2024.

"I have seen polystyrene stop being bought as often back in December 2023, but recently the demand just started to pick back up, so I could see pricing start to get moving here soon," said a recycler in the South. "But the volume of people buying is still not there."

Currently, recycled PVC is not seeing any movement for 2024, as many companies still have extra material and there has been no increase in demand.

"I'm not seeing the pricing increase because there is not a demand in the industry, people have enough inventory," said a recycler in Florida.