Plastic #1 PET Movement Slows
This month, Member Services Manager, Brian Patnoe, offers operators some insight into the #1 polyethylene terephthalate (PET) plastic slowdown.
If you've tried moving plastics in the past month, you might have noticed a long delay in getting prices or even moving plastic in general. While the plastics industry is very complex, I wanted to share some of the basic reasons why #1 PET plastic in particular has become particularly challenging to move.
First, we have to look at the supply and demand of recycled PET. Right now, there is an overabundance of global surplus combined with a low demand. Though there are a few reasons for this, one of the biggest culprits can be found in the end use of recycled plastic.
PET is fairly versatile but is predominantly recycled back into new containers, clothing, or carpeting. However, cotton prices are currently down about 16% from a year ago. This means it may be cheaper in some instances to use cotton instead of recycled PET. Additionally, the clothing industry on the whole has slowed.
The economics of PET recycling are further compounded by the fact that within this strange economy we are dealing with, carpeting - and especially commercial carpeting - is also in low demand.
The fiscal year of many major manufacturing and processing businesses ended on June 30th. From what I am hearing, businesses are trying to eliminate any surplus they have on hand, so they can get the materials off the books and recorded as revenue. This has led a couple recycling facilities to put in an unusually low incoming quota for the month of June.
If you have room, I recommend holding on to your plastics a little while longer. If you don't have room to hold your plastics, we ask that you please give us time to find a home for the material.
While I think plastics will be slightly easier to move in July, we are expecting this backlog of June material to slow down the industry for a couple months until we are caught up again.
Our great logistics team is doing their best to move the material for you, but please be patient and we appreciate your understanding!
As always if you have any questions feel free to reach out to our member services team at NRRA by emailing: firstname.lastname@example.org or calling 603-736-4401.