2006 May bring more stable prices for recycled resins.

* While forecasting the future seems harder than ever these days, sellers of recycled plastics tell PlasTICS TECHNOLOGY that they expect prices to stabilize in 2006 at some point below their recent peak. However, they have little solid evidence beyond the assumption that "what goes up must come down."

Recycled resin prices in 2005 started out on a volatile note and only got worse as the year progressed. After Hurricanes Katrina and Rita, virgin resins became even harder to get, and demand for recycled resins soared, as did their prices. Reprocessors say they have been selling everything they can make.

R-HDPE in high demand

HDPE has probably seen the greatest price escalation among recycled resins this year. The upward trend was not a straight one, however. Prices soared, then leveled off, then soared again. On the low end, prices for natural post-consumer pellets started the year at 43 cents/lb and now are as high as 60 cents/lb. Natural gas prices were originally the major culprit beyond those hikes. But then the hurricanes temporarily knocked out roughly 20% of virgin HDPE production.

Blow molders seem to be particularly desperate for material and are making up for virgin shortfalls with with recycled resin, according to one recycler. 'We are sold out for the next three months," he adds.

R-PS prices restrained

Production capacity for virgin polystyrene was also upset by the two hurricanes, even more so than PP or PE operations, says one reprocessor. But recycled PS prices did not respond proportionally. "The virgin PS market had already softened a bit when the hurricanes struck," says this observer. "While many prime resin manufacturers declared force majeure and pushed their prices up, recyclers used this as an opportunity to unload some inventory-but without big price hikes. Although recycled prices are firm, they haven't spiked the way other materials did," he says.

Overall, recycled PS saw the least dramatic change in prices during 2005. In some markets, prices are up as much as 10 cents/lb, but in many others the increases are as little as 4 cents/lb. "We have customers saying they don't want to buy anything in November," one source comments. "So a lot of regrind, repro, and offspec PS is available." And that situation may not change soon. This source notes, "When the virgin plants restart, there is likely to be even more off-grade material available."

R-PET is booming

Recycled PET prices have jumped 8 cents to 10 cents/lb in 2005, but observers say prices are likely to retreat some in 2006. "Demand for post-consumer PET has increased tremendously since the hurricanes because of difficulties in making and shipping virgin material. Many customers are buying recycled material out of necessity. A lot of PET has been imported in the last few months, which has filled in the U.S. void," says one recycler. "We expect the virgin supply to improve as the feedstock plants, like those for ethylene glycol, come back on line. As plants are able to make more virgin PET, prices will start to stabilize for both virgin and recycled products."

RECYCLED RESIN PRICES

                        Pellets     Flake
                        cents/1b   cents/1b
PET Bottles (Clean)
Clear Post-Consumer      70-75      57-62
Green Post-Consumer      60-63      48-52

HOPE (Clean)
Natural Post-Consumer    60-65      34-42
Mixed Colors             57-62      33-36

Polystyrene
Post-Consumer
  High Impact
    Black                62-65      53-56
    Natural              69-72        --
  General Purpose
    Black                43-45      35-40
    Natural              60-65      42-46

Polypropylene
Post-Industrial          34-40      30-32
Post-Consumer            30-32        --

Polyethylene Film
Post-Consumer
  Stretch                28           --
  Printed/Mixed          13           --
Post-Industrial
  Printed                20           --
  Not Printed            24           --

PVC
Post-Industrial
  Flexible               55-65        --
  Rigid                  60-73        --