Plastic Market Profile, 1993/94

August 1994

Metro
Solid Waste Department
600 NE Grand Ave.
Portland, OR 97232-2736
(503) 797-1650
Fax (503) 797-1795

Overview

Plastics continue to be recycled at a relatively low rate compared to other materials. Generation of waste plastics declined slightly in the Metro area in 1993 and recycling remained essentially unchanged compared to 1992.

Consumers and businesses continue to want to recycle plastics, but opportunities to do so have been constrained due to underdeveloped secondary markets and recovery infrastructure. Approximately 9,941 of the 86,255 calls Metro's Recycling Information Center received between July 1993 and June 1994 were about plastics.

Spurred by the convergence of numerous development efforts and the upturn in the general economy, significant plastic recycling collection and market developments occurred in the Pacific Northwest, nationally and internationally during 1993 and the first half of 1994.

Graphic: U.S. Resin Consumption Forecast (in billions of pounds) (1991-1996), "Plastics News," December 20, 1993.

Key Facts

Major Generators:

• Households,
  
• Warehouses,
  
• Certain manufacturers,
  
• Nurseries and farms,
  
• Restaurants,
  
• Schools,
  
• Hospitals,
  
• Printers,
  
• Dry cleaners,
  
• Retail, and
  
• Grocery stores

Estimated Recovery: 6,721 tons of all resin types combined = 7 percent of waste plastics generated.[2]

Handlers/Processors/Manufacturers: See table on pg 4 of source document

Origin of Recovered Material: Oregon and Washington[3]

Secondary Uses:

• Plastic lumber,
  
• Trash bags,
  
• Grocery bags,
  
• Detergent bottles,
  
• Oil cans,
  
• Compost bins,
  
• Flower pots,
  
• Fence posts,
  
• Drainage pipe,
  
• Toys,
  
• Milk crates,
  
• Garbage cans,
  
• Polyester fiber

• Oregon,
  
• Washington,
  
• California,
  
• South Carolina,
  
• New Jersey,
  
• Pennsylvania,
  
• Georgia,
  
• Minnesota,
  
• Illinois,
  
• Texas,
  
• Canada,
  
• Hong Kong,
  
• China,
  
• Philippines,
  
• Mexico

Factors Affecting Markets and Recovery:

• General economy,
  
• World oil prices,
  
• Quality of recovered material,
  
• Consumer demand for recycled-content plastic products,
  
• Minimum recycled-content manufacturing legislation,
  
• Foreign supply and demand of virgin and recycled resins,
  
• "Bottle Bill" deposit return program,
  
• Confusion about plastic recycling codes,
  
• Manufacturing feedstock substitution patterns,
  
• Collection and processing costs,
  
• Concentration of plastics manufacturing capacity in Midwest and Southeast regions of the US.

Outlook: Improving

Pacific Northwest Developments

• The American Plastics Council awarded a contract to the Garten Foundation in Salem to operate a two million pound per year plastic recycling facility. Scheduled to begin operating by the end of 1994, this facility will use advanced automated technology to sort plastic bottles and containers by color, optical density (i.e., clear, translucent or opaque) and resin type (PET, HDPE, PVC, PP, and PP). It is designed to reduce processing costs and improve the marketability of recovered plastics.

• Recycle Works, KB Recycling and Metropolitan Recycling & Disposal Corp. began accepting all plastic bottles, and 50 Thriftway stores across the region expanded their "2-4-6" collection programs to include all rigid plastic containers coded 1 through 7.

• Demand for locally manufactured recycled plastic lumber surged as wood products prices remained high and construction activity remained strong. However, a local plastic lumber manufacturer, KEPT Inc., moved out of the region due to zoning issues.

• Metro received numerous inquiries from Washington State businesses interested in sourcing HDPE and PET from the Metro area.

• Local processing capacity expanded with the addition of an extrusion line at Denton Plastics.

• Several of the larger cities in the Metro region, including Portland and Beaverton, launched curbside collection programs for HDPE milk jugs.

• The National Association for Plastic Container Recovery (NAPCOR) began underwriting the cost of signs and drop boxes to aid custom PETE recycling.

• Several promising and innovative entrepreneurial plastics recycling ventures were launched.

• The medical and nursery industries moved aggressively to increase recovery of plastics they generate.

• Royal Recovery and Partek completed a ten-month pilot project in cooperation with Chevron to recover one-quart, HDPE motor oil bottles at Chevron stations. More than 30 Chevron stations offer oil bottle recycling service to the public.

• DEQ drafted the administrative rules for implementing Oregon's rigid plastic container law. Once adopted, these requirements are expected to reduce waste plastic generation and to increase demand for recovered plastics.

• The 1993 PET and HDPE container recovery rates for the Metro area were 62 percent and 43 percent, respectively. These are significantly higher than comparable national recycling rates.[5]

• The Clean Washington Center (CWC), a division of Washington's Department of Trade and Economic Development, conducted a number of market development projects intended to stimulate regional demand for recovered plastics. These included:
  
  • creation of a post-consumer resin materials characterization database,
    
  • financial audits for medical waste plastics, and
    
  • impact testing of recycled plastic sign posts.

  The CWC also received a $1.2 million grant from the National Institute of Standards and Technology to develop and evaluate new recycling technologies and to provide technical assistance to manufacturers seeking to use recycled feedstocks. These efforts are focused on Washington's recycling infrastructure, but the information they generate will be disseminated through manufacturing extension centers throughout the United States.

National Developments

• The Chicago Board of Trade (CBOT) announced its intention to include PET and HDPE in the small group of recovered materials for which detailed transaction price information will be posted on a CBOT computer bulletin board as part of a pilot project to improve the efficiency and effectiveness of recycled plastics buying and selling.

• The American Plastics Council established a national telephone hotline to obtain current information about the availability of recycled plastic products. The APC also issued a Shoppers Handbook to increase demand for recycled plastic products.

• The federal Food and Drug Administration issued more than a dozen letters of "non-objection" to using post-consumer recycled PET, polystyrene and other resins in food and beverage containers.[6]

• Resin prices generally increased in late 1993 and early 1994 due to overall increases in demand, led by the electronics, packaging, transportation and housing industries.[7]

• Major recycled plastic processing and manufacturing capacity expansions occurred, particularly for PET and HDPE in states east of the Rockies. These include:
  
  • New Jersey
    
  • Pennsylvania
    
  • Illinois
    
  • Georgia
    
  • Minnesota
    
  • North Carolina

• Minimum-content requirements on plastic manufacturers continued to proliferate nationwide.

• Numerous companies continued refining automated plastic sorting technologies.

• New partnerships were formed to make value-added recycled plastic products. The most visible example of this was the formation of a partnership between Wellman and Patagonia to manufacture a fleece jacket using recycled PET.

• Major plastics manufacturers voluntarily converted to more recyclable packaging. For example, Kraft Foods switched from polypropylene to PET for making food containers with handles. These efforts are noticeable in Oregon's wastestream, according to Oregon handlers of recovered plastics.

International Developments

• Major recycled plastic manufacturing capacity expansions occurred in Europe, Mexico, Canada and Asia.
  
• Favorable exchange rates in the first half of 1994 are stimulating export demand for recovered plastics, particularly in Asia.

Recovery and Disposal Data

• Plastic packaging and plastic products make up 2.6 percent and 6.9 percent by weight, respectively, of the Metro wastestream. Rigid plastic containers covered under the 1991 Oregon Recycling Act make up 0.8 percent of the Metro wastestream.[8]
  
• Milk jugs, soda bottles and other HDPE and PET containers account for more than 80 percent of all plastic recycled in the Metro area.[9]
  

  Recycling Infrastructure

  As Table 1 (on page 4 of source document) shows, the majority of plastics recyclers in the Metro area handle HDPE, while a smaller number handle other resins. Most of these recycling businesses are collectors and intermediate processors, meaning they prepare recovered plastics for processing into manufacturing feedstocks. Five companies in the Metro area produce and/or use recovered plastic feedstock, most of which comes from the Metro area. Three of these utilize HDPE; one utilizes polystyrene; two utilize polypropylene; three utilize LDPE and one utilizes PVC. HDPE milk jugs account for 62 percent of all HDPE recycled in the Metro area.[10]

  Nearly half of all milk jugs recycled are recovered through curbside collection programs. Curbside collection of milk jugs has been increasing rapidly since Metro began tracking it in 1991. The balance of milk jugs recycled are delivered by commercial haulers and self-haulers to buy back centers and depots. KB Recycling is the main outlet for milk jugs recovered in the Metro area. Most other HDPE recycled comes from businesses. Denton Plastics in Portland recycles most of this material.

  Graphic: Metro-area Post-Consumer Plastic Recycling and Disposal by Resin Type [(See source document.)]

  Table 1: West Coast Companies Handling Post-Consumer Plastics (excludes collectors outside Metro area) [(See source document.)]

  Graphic: Metro-area Milk Jug Recycling by Source (1991-93) [(See source document.)]

  According to Metro's Recycling Levels Survey, Thriftway's popular "2-4-6" program collected about six percent of all milk jugs recycled in the Metro area in 1993, 8.5 percent of all HDPE recycled, 18 percent of all LDPE recycled, and 30 percent of all polystyrene. In July 1994, Thriftway began collecting all plastic containers (#1-7). Partek in Vancouver receives the Thriftway material.

  The vast majority of PET recycled in the Metro area is collected by Container Recovery Inc. (CRInc) from retail grocery stores through the "Bottle Bill." Most of this material is shipped to South Carolina for recycling.

  The Plastic Recovery Facility (PRF), slated to begin operating at the Garten Foundation in Salem before the end of 1994, will increase the capacity of the plastic processing system serving the Metro region. It will also change the quantity and flow of recovered plastics through the local recycling system. With the exception of milk jugs and "Bottle Bill" PET, most rigid plastic containers made with PET, HDPE, PVC, PP and PS will flow to the PRF for sorting. The PRF will then market some of this sorted material to processors in the Metro area, such as Denton and Partek, and some to processors in other states and offshore, depending on the type of resin and market conditions.

  Secondary Uses by Resin Type

  Polyethylene Terephalate (PET)

  Most of the bottle bill PET collected in the Metro area is marketed in baled or ground form to Wellman Industries in Johnsonville, South Carolina, where it is reclaimed and used in fiber applications such as carpeting, sleeping bags, ski jackets and pillows. This resin also is used in the Pacific Northwest to make new soft drink bottles and futon mattresses. Markets for Oregon PET also exist in the midwestern, eastern and southern United States.

  High Density Polyethylene (HDPE)

  HDPE resin is manufactured in several forms, each of which can be used for different applications. Recovered milk jugs, the most commonly recycled HDPE product in the Metro area, are recycled in the Northwest into a range of non-food and plastic products such as detergent bottles, flower pots, sign posts, shipping containers, grocery bags and garbage cans. In spite of these in-region markets, a significant portion of the milk jugs recovered in Oregon in 1993 were exported to Canada and Asia for recycling.

  Polystyrene (PS)

  Most of the polystyrene recovered in Oregon is shipped to the National Polystyrene Recycling Company in California that processes it for sale to manufacturers of wall and building insulation, protective foam packaging, office products, videotape cassette cases, egg cartons, decorative and architectural concrete, fast food "clamshells" and hard food trays. A small amount of this material is used in-region to make promotional products such as visors and yo-yos.

  Table: Plastic Coding, Characteristics and Applications [(See source document.)]

  Graphic: National Pricing History (cents per pound)--HDPE, PET, LDPE [(See source document.)]

  Graphic: National Pricing History (cents per pound)--PS, Polypropylene, PVC [(See source document.)]

  Polyvinylchloride (PVC)

  Reclaimed PVC is used to make non-food containers and the middle layer of a multi-layer food bottle. It is also used to make drainage pipes and other construction materials.

  Low Density Polyethylene (LDPE)

  LDPE is used to make bags and wrapping film. It is also used in plastic lumber. A significant amount of this material is exported to Canada and Asia for recycling.

  Polypropylene (PP)

  Polypropylene containers are being recycled in-state into flower pots and other nursery products. This materials also can be used to make other kinds of containers, as well as car battery casings and other consumer products.

  Mixed Plastics

  Selected, mixed plastics are being used in-state to manufacture plastic lumber and other durable products, including park benches, picnic tables, decking and pilings. The PRF will sort mixed plastics into single-resin streams for enhanced marketability. Purchase orders for loads of mixed plastic containers are in place and increasing.

  Factors Affecting Plastics Markets

  Processing Costs

  Plastic processing involves sorting, grinding and cleaning recovered plastics and remelting them into feedstock-grade pellets or flakes that can be chemically or thermally reformed into a wide variety of new products. Plastic product manufacturing is highly sensitive to contaminants commonly found in unprocessed recovered plastics.

  Recovered plastics with minimal contamination typically costs less to process and market than poor quality recovered plastics. Although several plastics are collected source-separated in Oregon, contamination of recovered plastics, especially from residential sources, is common. Contamination tends to occur in two forms:

  1. Co-mingling of resin types.
     
  2. Non-plastic contaminants such as metals, rocks, glue, food, etc.

  Such contamination increases the need for sorting and cleaning recovered material, and thus, to increase processing costs.

  Machines have been developed in recent years to sort recovered plastics automatically, thus decreasing the need for costly manual sorting to ensure quality control. This new technology is beginning to be used more widely in the plastic recycling industry. It will be applied at the new PRF in Salem to reduce processing costs and increase feedstock quality, particularly for rigid plastic containers such as those commonly generated by households.

  Demand for Recycled Plastic Products

  Plastic products vary greatly in value, from simple forms to sophisticated engineered plastics used in computers, cars and medical equipment. Plastic has some unique performance characteristics that limit the degree to which it competes directly with other materials. Unlike steel and glass, it is lightweight. Unlike glass, it is shatter-resistant. Unlike other materials, it can be molded into virtually any shape and it can be virtually any color. Its low cost and minimal energy requirements allow many more companies to use plastics than metal or glass. As a result, plastics manufacturing has evolved rapidly, and the plastics industry has become structurally diverse and complex.

  Demand for recycled plastic products and materials generally is increasing and this is stimulating expansion of recycled plastics manufacturing. In fact, there was a 12 percent increase in the number of US scrap plastic facilities between August 1993 and May 1994, from 1,112 to 1,245.[11]

  Most of these facilities bale, shred or granulate recovered plastics. About nine percent of scrap plastic handlers nationwide are reclaimers.

  Outlook

  Recovery of commercial and household plastics is expected to increase through 1995 as collection, processing and manufacturing capacity all expand and demand for recycled-content plastic products increases. However, several potential stumbling blocks may impede these advances.

  Pending Advances

  • The APC's commitment to guarantee minimum market prices for recovered plastics for three years will induce additional collection.

  • Washington State demand for recovered HDPE, PET and PS is increasing. This will increase recovery of these materials from the Metro area.

  • National and international processing and reclaiming capacity for all grades of plastic is increasing, and particularly for HDPE and PET. The introduction of detailed recycled plastic sales and purchasing transaction information through the Chicago Board of Trade will enhance the ability of Oregon collectors and processors to access distant but growing markets.

  • World oil prices, which have been relatively low for several years, are expected to increase in 1995 as worldwide production remains flat and consumption increases. Consumption will be driven by the accelerating economies in the US, Japan, Germany, China and other maturing Asian countries. Future increases in oil prices, coupled with projected increases in consumption of all grades of plastic, will drive the prices of virgin resins up, thus making recycled resins more competitive.

  • In-state entrepreneurial ventures currently being developed may increase demand for polypropylene, polystyrene and HDPE.

  • With the addition of administrative support staff and assistance from the Oregon Economic Development Department's new Recycling Economic Development Advocate (REDA), the Oregon Recycling Markets Development Council will begin to implement strategies it has developed over the last three years. Its focus will be on technology and infrastructure development.

  • Some unmarketable, low-grade plastics may be recovered through pyrolysis to make plastic products or fuel.[12]

  • Expanding and improving private and public "buy recycled" education and promotion efforts will increase consumer demand for recycled plastic products.

  • With removal of FDA regulatory barriers, PET, polystyrene and other resins will be used increasingly in food and beverage packaging.

  • Metro's Targeted Generator Diversion Strategy will increase recovery of plastics from restaurants, grocery stores and nurseries in the Metro area.

  • Plastic product manufacturers will increasingly design plastic products for recyclability, and they will use product recyclability increasingly as a marketing tool. This approach will be backed up by revamped resin codes designed to minimize consumer confusion and frustration about recyclability, and by increased use of environmental certification programs such as Scientific Certification Systems (SCS Green Cross).

  • Marketing-manufacturing joint ventures to develop and produce new plastic products will proliferate. These will be focused on product-specific recycling (i.e., milk jugs, soda bottles, etc.), and on closed-loop service (i.e., motor oil bottles back to motor oil bottles).

  Potential Stumbling Blocks

  • "The Plastics Industry" remains structurally diverse, complex and largely fragmented. This could impede broad cooperation and commitment to move plastics recycling forward.

  • Material standards and specifications for the Chicago Board of Trade pilot project may be difficult and time-consuming to develop.

  • Local entrepreneurial ventures face many technical and financial challenges that can delay or undermine their development. Moreover, support for these types of ventures could be reduced as the state's Reclaimed Plastics Tax Credit and Business Energy Tax Credit programs are set to sunset in 1995.

  • National and international virgin resin manufacturing capacity is increasing. This could hold virgin resin prices down if oil prices remain low.

  • Export markets are inherently volatile. Industrialization of Asian countries could have a mixed impact on export markets as these countries will be consuming more virgin and recycled resins but will also be generating more waste plastics of their own. Plastics recovered from Europe also could saturate the world supply of recovered plastics and depress export prices. Finally, currency exchange rates are ever-changing.

  Footnotes

  [1] Generation equals quantity recovered from the Metro area for secondary uses plus quantity disposed.

  [2] This is "post-consumer waste" which is defined in Oregon Statute as "a material that would normally be disposed of as a solid waste, having completed its life cycle as a consumer or manufacturing item." The term "plastic" includes plastic packaging, containers and products made from all major resin types.

  [3] This refers to all sources of recovered plastic used by Metro-area processors. It is intended to help define the scope of this emerging industry.

  [4] These prices are based on conversations with processors, industry consultants and industry analysts.

  [5] "Metro Recycling and Recovery Level Survey"

  [6] Based on interview with "Plastics Recycling Update" Editor, Jerry Powell.

  [7] From various reports in "Plastics Recycling Update" and "Plastics News"

  [8] 1993-94 "Metro Waste Characterization Study, Fall Sort"

  [9] "Metro Recycling Level Survey"

  [10] "Metro Recycling Level Survey"

  [11] "Plastics Recycling Update," May 1994.

  [12] Pyrolysis is a thermal process that depolymerizes plastics into a hydrocarbon liquid suitable for use as a feedstock to make plastic products or as a fuel.

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  Last Updated: December 18, 1995