Recycled material prices lower.

* In 2006, plastics processors benefited from a dramatic downturn in prices of recycled materials early in the year. While prices rebounded somewhat, they are still lower in the fourth quarter than they were a year earlier. Some recyclers expect stable prices in the first part of 2007, but others expect further declines.

R-PET prices soft

Recycled PET prices eased 1 cents/lb in the last three months, leaving them 9 cents lower than a year ago. Yet demand for recycled PET is still strong, reclaimers say. Wellman's plan to close its Johnsonville, S.C., PET reprocessing plant is apt to affect the market in 2007, unless a buyer is found to run the plant.

This year is ending with strong demand, according to reprocessors. Said one, "We're more worried about 2007, because of all the new virgin capacity coming on." Another source predicts the oversupply won't last long and sees other factors spurring need for recycled material. Wal-Mart announced that in 2008 it will start rewarding suppliers for using eco-friendly packaging and conserving natural resources. One recycler enthused, "That's a dynamic we've never seen before. There is rumor that Costco may follow suit, and Starbucks has also made announcements about eco-friendly packaging."

R-HDPE may drop

Recycled HDPE rose 3 cents to 6 cents/lb this quarter but is still down from last year by anywhere from 4 cents to 10 cents/lb. Industry sources point to soft demand: "Housing starts are slow," notes one reseller. "Everything indicates prices will come down more in early 2007."

Other materials

Recycled PS prices haven't come down as much as other materials. "They haven't been going up, but they are stable," one source said.

Recycled PP prices declined in the past year, but the fourth-quarter average is off by only about 2 cents/lb. One reprocessor said, "I expect it to go lower before it stabilizes. I think demand is a little off--it always softens at the end of the year, but a little more so this year."

RECYCLED RESIN PRICES
                         Pellets    Flake
                         cent/lb   cent/lb

PET Bottles (Clean)
Clear Post-Consumer       61-66     49-52
Green Post-Consumer       50-54     40-44

HOPE (Clean)
Natural Post-Consumer     50-56     42-44
Mixed Colors              36-39     27-29

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           36-39     38-39
Post-Consumer             51-54       -

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       -