Tight supply from winter storm pushes rLDPE spot pricing higher

The U.S. has faced relentless snowfall throughout January, from a Midwest blizzard earlier in the month to a historic winter storm that blanketed the Gulf Coast this week.

Extreme weather has disrupted recycling collection efforts, as waste companies shift priorities, similar to the impacts seen during hurricane season.

Recycled low-density polyethylene supply has tightened as a result, with multiple market sources confirming the winter weather impact.

"We're seeing supply tighten up across the board due to the inclement weather over the last week," a source said.

Bids were seen climbing in the recycled LDPE market on Jan. 24 in response to the constrained supply as buyers clamored to secure a load.

A bid from Sigma Recycling Inc was heard at 18 cents/lb Delivered Chicago, up 2 cents from bids seen yesterday on Jan. 23 for a bale of recycled LDPE grade A.

Despite the typical off-season for major domestic rLDPE applications such as decking and plastic lumber, the market is not experiencing the expected supply surplus due to the decline in waste collection caused by severe weather.

A distributor confirmed the difficulty in sourcing recycled LDPE following the supply crunch and rising prices.

"Sellers are not willing to sell their loads because of the tight inventory. They can't get more supply because of the snow," the same distributor said.

A bid from Sigma Recycling for recycled LDPE Grade-B bales also increased to 11 cents/lb Delivered Chicago on Jan. 24, up 1 cent from the previous day.

There is no clear timeframe for when recycled LDPE supply will stabilize, according to sources.

Platts assessed post-use LDPE Grade-A bales at 17 cents/lb FOB Chicago on Jan. 24, up 2.5 cents/lb on the day and post-use LDPE Grade-B bales were assessed at 10 cents/lb FOB Chicago, up 1.5 cent/lb on the day.