:* - tics Rc

Key questions in Although the current market is boring, excitement is ahead for PIT plastics recovery. PET bottle recycling a

S ince its introduction in the late 1970s, In comparison to prices paid for homo- At the same time, offshore resin and fiberpm the polyethylene terephthalate (PET) polymer high-density polyethylene (HDPE) ducers, especially those in China, have captured

bottle has proved to be one of the top packag- bottles, prices paid by domestic reclaimers for more of the global market. By one analysis, Chi- ing success stories. Unfortunately, although bales of PET bottles have suffered in recent nanow can make 1.8 million to 1.9 million tons

r special % u"V focus ,$

L P L A S I ICS 1 A

scrap bottle recovery levels slowly &e moving months (see Table 2), with prices falling steadi- per year of virgin PET, exceeding Chinese higher, a sterling recycling success has yet to ly since May 2001. demand and making the country a net exporter. be attained. Market factors, however, point to What explains this price weakness? The Fiber market fundamentals in the U.S. are significant change ahead. principal cause of the flat-lining of prices, at affected by these dynamics. That is the reason

about seven to nine cents per pound, is a poor several polyester fiber producers, including TWO rates of growth polyester fiber market. DuPont (Wilmington, Delaware) and KoSa The single biggest problem in PET bottle ray- (Houston), backed out of the virgin fiber busi- cling is that the growth in recycling hasn't kept ness, and why one of the principal producers up with the surge in bottle use. of recycled fiber from old bottles, Wellman,

American materials recovery programs Inc. (Shrewsbury, New Jersey), has been less continue to pick up and process more and active as a recycling market player. more PET bottles each year. For exam- At the same time, several of the large, ple, some 834 million pounds of post-

( integrated PET reclaimers that make car-

consumer PET were sold by U.S. col- pet material from recycled plastic, lectors last year, says the National Asso- including Mohawk Industries (Sum- ciation for PET Container Resources r merville, Georgia) and Beaulieu Fibers (Charlotte, North Carolina). This was an & Fabrics (Rome, Georgia), have been increase of 8.5 percent from the year-ear- whipsawed by the ups and downs in the car- lier performance, a level of growth for 2001 pet textile market in recent years. that outstripped those of most other recyclables. As a result of all these conditions, PET bot-

Nonetheless, recycling's steady push tle use by fiber producers declined last year by upward pales in comparison to the remark- about 4 percent.

Resource Recycling November 2002

able rise in PET bottle use. As shown in Table 1, PET bottle consumption grew 71.4 percent over the six-year period, while PET recycling volumes rose 19.7 percent. Thus, the recycling rate dropped steadily.

Price S O ~ ~ N ~ S S prevails Even if PET recovery gradually is moving higher, it is happening in a dull market.

Polyester resin, fiber and many of the prod- ucts made from the fiber are now worldwide commodities. The domestic industry has been buffeted by a storm of market problems in recent years. Since the mid- 1990s, a world- wide glut of cotton, which has pushed down cotton prices, has hurt polyester demand (cot- ton is a direct competitor to polyester fiber in many applications).

Chinese polyester market a major driver The offshore market, which is major element of the U.S. PET recycling game, also is under- going considerable change.

Export demand is important to PET recy- cling, especially on the West Coast, with exporters holding about one-fourth of the U.S.

PET b o t t l e u s e and r e c o v e r y , 1 I,,-200, I B o t t l e s u s e d . B o t t l e s c o l l e c t e d . R e c o v e r v ra te .

in b i l l i o n a o u n b s in m i l l i o n ? o u n d s in a e r h e n t '

2.20 697 31.7

bottle recycling market (see Figure 1). however, suggest As shown inTable 3, Chinese buyers, includ- that future recy-

ing those using Hong Kong as a receiving port, cling growth may dominate the foreign market for U.S. plastics slow down. The scrap, including PET containers. Overall PET Chinese govern- bottle exports, which are up 6.9 percent this ment has been year through July, are shipped primarily through aggressive in seek- Source: Na four ports: Los Angeles-Long Beach (44 per- cent of 2002 shipments), San Francisco Bay (16 percent), Seattle-Tacoma (13 percent) and New York-New Jersey (1 1 percent).

The large majority of the PET sent to Chi- na is used to make polyester fiber, given that China is the world's fastest-growing textile and clothing producer. Especially when global cot- ton supplies fall and prices thus rise, Chinese textile producers seek new volumes of poly- ester fiber.

Changes in the Chinese polyester market,

ing investment in chemical and virgin plastics production, and, as a result, a number of primary PET plants have opened or are being built. Some recycled PET exporters serving the U.S. recycling mar- ket say that new virgin polyester volumes in China will dampen the demand over t i e for bottle bales from the U.S. At the same time, as PET bottle use becomes more common throughout Asia, local bottle recovery systems will be established, and Asian bottle reclaimers will seek out these volumes before they

I WE THINK t::"" I-

Whot type of recycloble r 20 yeors. 21 million containers. moteriol needs to be contained? A-1 selection, A-1 performonce, A-1 How much? How heovy? Breokoble, 7 value. Our ergonomically superior hozordous? How often will the boxes be F containers ore specified by houlers ond com- used? Should they be toll, short, wide; ore munities throughout North America and lids required? Office, curbside? Custom Europe who recoynize the efficiencies color or stock? For every recycling delivered by superior design. contoiner need, A-1 probobly has the answer, in the most comprehensive Call 1.800-777.0979 Ext 21/22 contoiner line in the business- Fax (905) 451.9977 in sizes from 4 to 22 gollons. E-mail : rclp@idirect,com

purchase bales from the U.S.

Bottles-to-bottles will be the new market maker If domestic and Chinese polyester producers will play a slightly quieter role in the future market, where will large new market demand appear?

As seen in Table 4, NAPCOR research shows that the use of recycled PET to make new food and beverage bottles in 2001 had the

-18 2 B a l e p r i ces , 2001-2002 1

Reader service # 156

~ e s o u r c e Recyclilzg November 2002

largest growth among the various market seg- ments. In fact, the use of PET in new food and beverage bottles has grown on a volume basis between 1996 and 200 1 by 22 1 percent, to 77 million pounds last year. And, this growth will continue in the coming years.

Several packagers, led by Coca-Cola (Atlanta) and Pepsi-Cola (Purchase, New York), have pledged to increase their use of recycled PET in new containers. By most estimates, these actions should move up recycled PET consumption by 225 million to 250 million pounds per year, pushing overall demand high- er by 25 to 30 percent.

Where will the bottles come from? With PET bottle collections increasing at a meager 3 to 4 percent annually, new recovery efforts will be needed if bottle supplies are to keep up with demand in the coming years. This is especially true because the analytical evi- dence indicates that a rise in bale prices is insuf- ficient to produce huge new volumes. (As with other forms of beverage container recycling, there's little statistical correlation between the bale price and the recycling rate.)

This issue of a pending shortfall in PET vol- umes has captured the attention of many. For example, an effort is being made to establish

At the same time, industry groups have Export role of China and Hong Kong, in decided to help try to mble percent of exports, January-July, 2002 get recycling levels moving higher. For HonaKona Combint example, the Nation- I

!QsirJ 'Polyethylene Polystyrenf Pnl\/\~in\/l r t

Jacksonville, Florida and Pittsburgh, with a goal of deG&inhg Recovered PET uses, by percent of the the best promotional domestic market, 1996-2001 I and collection tools to use to capture con- tainers consumed outside the home

of Resource Recy- cling). In addition, both NAPCOR and the Association of Post-Consumer Plastic Recyclers

negotiations between beverage producers, state (Arlington, Virginia) have programs underway markets are provided each month in Plastics Recy- and local governments, and environmental to push recovery levels upward. RR cling update. For a sample copy of the newsletter, interests to see if some new approaches to bev- call (503) 233-1305 or send a request to erage container recycling show promise. Extensive details regarding plastic bottle recycling pru@resource-recycling.com.