According to sources who recycle today contacted mid-July.
Contact with a California-based HDPE reprocessor says supply is plentiful, noting that volumes have started to increase in the past two months. He adds that low export activity off the west coast has also contributed to the “abundance” of scrap metal available.
The HDPE reprocessor says his business has reached the point where it is turning away potential suppliers as it is reluctant to stockpile with the possibility of a looming recession.
A PET reprocessor operating in the Southeast and Northeast says PET bale prices are also falling as supply increases, which is traditional in the summer months. However, the reprocessor notes that a major buyer of PET bales is also out of the market due to unscheduled maintenance and is therefore not buying material.
“Consistent with the bullets, the price of flakes is beginning to decline, although the price of rPET (recycled PET) pellets is still high due to the tightening and rising prices of virgin PET,” the reprocessor adds.
The PET reprocessor also points to the effects of rising inflation, which hit 9.1% year-on-year in June, the biggest 12-month increase since 1981, according to The Economics Daily produced by the US Department of Labor Bureau of Labor Statistics. “The market is seeing the first signs of pressure on consumer finances, impacting the fiber market [and] leading to lower rPET usage volumes,” explains the reprocessor.
“The rPET market dynamics during the second quarter remained relatively stable, given the rapid price increase we saw during the first quarter,” continues the PET reprocessor. “We saw much more volatility in virgin PET than in rPET during the second quarter.”
The HDPE Reprocessor says natural bottle bales are selling for 45 to 48 cents a pound in mid-July, while mixed color bales are selling for 15 to 17 cents a pound. He says the price decline started gradually, but has been more significant recently, ranging from 15 to 20 percent.
With prices falling and the possibility of a recession, the HDPE reprocessor says companies are “afraid” of holding too many bales in stock.
He describes his company’s recycled HDPE sales as “pretty robust,” though he fears that could change if the advance estimate of gross domestic product (GDP) in the second quarter, which the Bureau of Economic Analysis of the US Department of Commerce is scheduled for release on July 28, reveals a decline.
While a recession is defined as a period of sustained low or negative GDP growth that is accompanied by a significant increase in the unemployment rate, the HDPE reprocessor asserts that “lack of employees is the biggest elephant in the room,” noting that many companies are struggling to fill vacancies.
On the positive side, he says freight rates are “definitely going in the right direction,” adding that compared to December of last year, long-haul trucking rates are down 35% to 45%, while short-haul fares have been reduced by 15 percent to 20 percent.