Plastics recyclers fighting to stay alive

Global – The fall in oil prices has dragged down virgin plastic values and erased the advantage held by recyclers, the Wall Street Journal has reported. ‘Many in the recycling industry are hanging by the skin of their teeth,’ says Chris Collier, commercial director of CK Group. ‘Everybody is desperately chasing for money to stay alive.’

Since June last year, the price of a barrel of oil has fallen more than 50%. Virgin PET cost 83 cents a pound at the beginning of the year, or 15% more than post-consumer plastic; by late March, virgin PET had dropped to 67 cents a pound, or 7% less than the recycled material.

CK Group now feels ‘squeezed’ by market conditions, not least because of its recent purchase of a large colour sorting machine for more than US$ 500 000. ‘Our scrap suppliers now want us to pay up front, while our customers – those who still stand by recycled plastics – want to stretch payments as long as possible,’ Collier explains.

Elsewhere, ECO Plastics – whose operation in the east of England has been called ‘the world’s largest plastics processing facility’ – recently went into administration and the company’s assets have been acquired by Germany’s Aurelius Group. Closed Loop Recycling, also based in the UK, is acknowledging the pressure too.

‘We are basically saying to our customers “Help us come through this by paying a premium for recycled plastic” – but few are,’ laments the company’s chief executive Chris Dow. Prices received by ‘middlemen’ when reselling some types of plastic have plummeted by as much as half in just a few months, says Allan Zozzaro, a partner at US-based Zozzaro Atlantic Coast Processing.

‘It’s putting a real strain on all recycling companies,’ he says. Municipalities have confirmed they are ‘definitely concerned’ about the possibility of having to pay for materials to be removed, notes Dominick D’Altilio, president of the Association of New Jersey Recyclers.

Meanwhile, Measom Freer & Co. in the UK is using more virgin material in the bottles it produces. ‘People are just not willing to pay a higher price for the eco-friendly stuff,’ notes company director Anne Freer. ‘We try to use as much recycled as possible, but it really comes down to price.’