US R-HDPE market to remain tight on low collection

HOUSTON (ICIS)–Natural high-density polyethylene (HDPE) bale prices continued to rise, due to renewed sustainability-driven demand for natural post-consumer recycled high-density polyethylene (R-HDPE) material.

Increasing demand is expected to continue throughout May, applying further upward pressure on systematically low supply due to declining collection rates.

HDPE bottle collection rates fell to 28.8% in 2020, down from 30.9% in 2019, according to a recent study published by Stina.

Despite the decrease in domestic collection, recyclers processed over 40,072 tonnes of HDPE bottle material in 2020, an increased overall volume due to additional imports, equalling approximately 3,583 tonnes more in 2020 than in 2019, per the report.

Per the ICIS Mechanical Recycling Supply Tracker, the US has over 3.3m tonnes of recycled polyethylene (R-PE) processing capacity, accounting for roughly 47% of the domestic mechanical recycling input capacity. A majority of US recyclers utilise post-industrial polyethylene (PE) feedstocks rather than post-consumer material.

Growth in import volumes or significant improvements in domestic collection will be needed to meet post-consumer recycled (PCR) content targets from fast-moving consumer goods (FMCG) companies and state regulation in New Jersey and Washington.

Mixed coloured HDPE bale demand softened prematurely this week, as historically, mixed coloured bale demand for the agriculture pipe sector would carry through the end of spring. As a result, prices have decreased across both coasts.

According to the study, natural HDPE bottles and mixed coloured HDPE bottles comprise 14.4% and 20% of collected plastic bottles in the US, respectively.

Percentage of Pounds of US Sourced Post-consumer Bottles Recovered for Recycling by Category

Source: Stina 2020 Post-consumer Plastic Recycling Data Report

West Coast natural HDPE bales rolled over, though still maintaining a narrow deficit from East Coast prices. West Coast bales are typically 10-12 cents/lb cheaper than East Coast bales to account for additional freight costs, in order to ship bales to the East Coast where the vast majority of reclaimers and converters reside.

Focus article by Emily Friedman

ICIS has launched a new US recycled polyethylene (R-PE) commodity service covering prices for natural and mixed-coloured post-consumer HDPE bales on the East and West Coasts and bottle-derived or post-industrial recycled HDPE and LDPE resin, including blow molding grade flake and pellet, injection grade flake and film grade pellet. Additionally, this new service covers emerging trends in the mechanical recycling and polyolefin based chemical recycling markets. To subscribe to the new pricing service, or for further information, please contact clientsuccess@icis.com.