Report for the USA
In the USA, the post-consumer plastics markets made a steady and consistent start to this year. Pricing remained static with little fluctuation while demand was stable to sluggish.
The PET market can best be summed up as uncertain, with stakeholders apprehensive about future trading. At the time of writing, scrap values have been flat since early March. Among the major factors contributing to the stagnation of bale prices, end-use purchases have dropped by 15% from the beginning of the year. This downward pressure on demand, coupled with the other major factor of cheap imports, explains slack prices. Both coasts of the USA have been affected by cheap imports of rPET in flake, pellet, sheet and other finished forms competing for buyers. Ocean freight rates have dropped 80% from the pandemic period, enabling importers to ship their rPET at a competitive level. The middle of the USA has not felt the competition in quite the same way.
On a positive note, California has seen all the major brands increase their use of rPET in bottle manufacturing and this trend is likely to continue as mandated content legislation takes effect. Further upbeat news is that Thailand, South Korea and Taiwan recently certified the use of rPET pellet in food-grade applications, meaning that current rPET imports into the USA will have a closer-to-home end market. Meanwhile, China’s economy has faltered and has not improved at the rate expected after COVID regulations were lifted.
Back in the USA, a major carpet manufacturer is hopeful that the second half of 2023 will see an uptick in economic growth and consumer confidence.
Unlike PET, the HDPE natural market has seen a gradual improvement, with prices increasing by US$ 0.04 per lb over the last few months and by as much as US$ 0.10 since the start of the year. This has been underpinned by greater use of rHDPE by end users, from 25% at the start of 2023 to the current 40%. Although not as steep, colour rHDPE has also seen a gradual increase in use and price, with greater commitments from the agricultural, auto and piping industries.
In contrast, all grades of LDPE remain flat for both the domestic and export markets, partly owing to high volumes and tepid demand.
A major PP converter in the USA has resumed operations after a period of downtime. Although this has not propelled the bale price upwards, it has increased demand and helped to steady the market. There has been no change in the prices for PP both domestically and for export.
Polystyrene packaging remains under scrutiny owing to a series of extended producer responsibility legislation that questions the material’s recyclability and low collection rates. The market is flat and has seen little growth. Expanded polystyrene is the exception as it continues to see healthy markets in Asia for producing frames and mouldings.
The main takeaway from the early months of 2023 is the uncertainty surrounding where markets are heading. Except for HDPE, all other plastic commodities are stable and prices generally remain constant. The hesitancy comes from fears that the economy will fall into recession, coupled with inflation putting pressure on operating costs. Overall, the stability of the market provides some level of comfort as prices are largely unchanged within a range that makes recycling operations financially viable.