Generation of plastic scrap has picked up in early 2013.

January 29, 2013
SDB Staff

Manufacturing activity appears to have picked up the pace in January relative to the end of 2012, according to sources, leading to improved plastic scrap generation. “The start of the new year brings an awakening in the manufacturing sector,” a reprocessor based in the Midwest says. “Orders are being manufactured, people are returning from break and scrap is being generated.”

A reprocessor based in the Southeast describes manufacturing activity as “unusually high” for this time of the year compared with years past. She says the packaging sector seems to be quite strong, adding that scrap generation is “much higher than last year.”

However, she also speculates that some generators may have been holding on to their scrap in the third quarter of 2012 in anticipation of higher prices to come, while consumers were reluctant to build up their raw material inventories in light of tax implications.

Generation has benefitted from the expansion of plastics accepted for recycling as well. According to a report released by the Canadian Plastics Industry Association (CPIA), Toronto, the non-bottle rigids stream saw a substantial increase in 2011. The association says postconsumer plastic packaging and products recycling in general increased in 2011 by 24 percent compared with 2010.

According to the report, conducted by Moore Recycling Associates Inc., Sonoma, Calif., the increase is the result of more material collected for recycling as well as more companies providing recycling statistics. In total, the report notes that more than 295,000 tons of postconsumer plastic were collected for recycling in Canada in 2011.

Compared with 2010, the recycled plastic quantities reported for 2011 by Moore Recycling Associates represent an increase of 19 percent for bottles, a 70 percent increase for non-bottle rigid plastics and a 1 percent increase for plastic bags and film.

The non-bottle rigid plastic stream saw a substantial increase of 70 percent in 2011 in part because more municipalities expanded collection to all plastic containers beyond PET (polyethylene terephthalate) bottles. “Simplifying collection practices for the public to recycle all plastic containers is helping grow plastic recycling,” says Cathy Cirko, vice president of CPIA.

The reprocessor based in the Southeast describes the prevailing attitude among buyers and sellers of plastic scrap as hesitant in the last quarter of 2013, saying that the presidential election and “fiscal cliff” at the federal level contributed to their uncertainty. With the start of 2013, however, she says buyers and sellers have been less conservative.

This less conservative attitude has led to an increase in domestic demand for secondary plastics. The reprocessor in the Midwest describes demand as firm to strong, while the reprocessor based in the Southeast says demand is particularly high for polypropylene (PP) and to a lesser extent for polyethylene (PE). She adds that polystyrene (PS) also appears to be doing well.

Prime PP increased in price by 12 to 14 cents, the reprocessor based in the Southeast says, noting that while she is unsure how this increase will affect secondary PP pricing, she is certain there will be some increase.

While PVC (polyvinyl chloride) demand and pricing have been lackluster in light of the depressed residential housing market, she says, positive movement has occurred recently. “It’s still not anywhere near where it used to be three years ago,” the reprocessor based in the Southeast says of secondary PVC, adding that she has lowered her expectations for that material so that any movement is good.

In terms of overseas demand, the reprocessor based in the Midwest says orders from Chinese consumers are starting to pick up as of mid-January. “With Chinese New Year being Feb. 10, exporters are now starting to buy material they know won’t ship until two weeks before or after the holiday.”