- Agricultural pipe manufacturing supporting color bale prices
- Natural bales said to be at pricing floor with larger buyers quiet
The price spread between natural and mixed color post-consumer high-density polyethylene bales narrowed anew in the week to Oct. 4, amid firming buying interest for color bales.
Increased buying levels were heard for color bales from the agricultural pipe sector, and natural bales buying interest was heard to be lower than expected.
As a result, the price spread was at 10 cents/lb, compared with 61.5 cents/lb in late May, according to Platts data.
With natural bales hovering in the low to mid-20s cents/lb in recent weeks, sources said this was likely a pricing floor.
However, prices for color bales can go very low, sources said, into the low single digits, due to the smaller market demand and wider availability compared to natural color.
"Natural bales are moving up, but not the way color bales are," one seller said.
With the sharp drop-off in natural bale pricing, larger buyers eased back on purchasing and did not have the most competitive pricing, the source said.
As a result, supply and demand are more balanced than in color bales, and pricing more stable, the source said.
In company news, the approach of 2025 US content targets for recycled plastics including HDPE could increase costs and risk, US pipe maker Advanced Drainage Systems said in its fiscal 2023 sustainability report.
"Potential shifts in the demand and supply of our key raw materials, including recycled and virgin plastic, could impact the cost of doing business, while stakeholder concerns about the plastics industry may create reputational risks across our value chain," ADS said.
ADS consumed one-quarter of the recycled HDPE bottles collected in the US during fiscal 2023, it said.
The share of raw materials ADS purchased in fiscal 2023 rose on the year for recycled and fell for virgin, it said.
Recycled materials composed 48% of material purchased, higher by 3 points on the year. Virgin materials also represented 48% of material purchased, lower by 2 points on the year. The balance each year was of unspecified origin.