Tight supplies, high prices seen for 2005.

Supply of all recycled materials in 2004 was tight as virgin resin prices skyrocketed and post-consumer resin became a bargain. Some observers say recycled resin prices could stabilize in 2005, but don't be surprised to see prices soar again.

R-HDPE: Strong demand

In some markets, recycled HDPE rose as much as 8 cents/lb in 2004 versus this time last year. "Recycled resin follows virgin pricing, and by all indications, virgin prices will stay high," says one observer.

Nonetheless, demand is strong. "Recyclers do not have enough material to come close to meeting demand," one source says. The market for mixed colors is particularly strong. Recyclers expect these conditions to continue through spring.

R-PP will remain high

Recycled PP this month costs as much as 11 cents/lb more than it did last November, and prices are still rising. That trend is expected to continue in the first quarter unless there is some relief from oil prices.

R-PS supply loosening up

Recycled polystyrene prices are out of sight. Some markets are 22 cents/lb higher than last November. One reprocessor notes, "We raised our prices three times. Customers took the first two on the chin, but for the third there was resistance. Some customers went away for a month. But most came back in November and they're not arguing about price." Still, he thinks prices have topped out.

Another says, "Scrap supply seems to be freeing up. We're buying again from people who three months ago only had a truckload every two months. Now they have two or three truckloads a month."

R-PET still rising

Recycled PET is up 4 cents to 8 cents/lb since last November, and reprocessors foresee more hikes this fall. Says one recycler, "We'll probably see a couple more increases in the next couple of months, then I expect things will level out a bit."

R-PET usage has grown because of bottle-to-bottle recycling programs, analysts say. "All of 2005 is likely to be tight on the supply side. If oil prices stay high, I think PET can go even higher," says one.

RECYCLED RESIN PRICES

                        Pellets      Flake
                        cents/lb    cents/lb

PET Bottles (Clean)
Clear Post-Consumer      58-62       49-52
Green Post-Consumer      49-52       41-43
HDPE (Clean)
Natural Post-Consumer    43-46       25-29
Mixed Colors             38-41       29-33
Polystyrene
Post-Consumer
  High Impact
    Black                58-62       44-46
    Natural              65-70         --
  General Purpose
    Black                45-47       33-35
    Natural              50-55       38-50
Polypropylene
Post-Industrial          32-38       28-32
Post-Consumer            28-30         --
Polyethylene Film
Post-Consumer
  Stretch                28            --
  Printed/Mixed          13            --
Post-Industrial
    Printed              20            --
    Not Printed          24            --
PVC
Post-Industrial
  Flexible               32-40         --
  Rigid                  50-66         --