Pessimism abounds for PE recycling industry

By Jerry Powell, Resource Recycling

Market observers are suggesting the value of recovered polyethylene will trend downward due to weakening primary feedstock prices.

The key reason recycling prices will go nowhere, say market analysts, is that there's way too much natural gas and ethane available in North America. Natural gas prices, which are now at a two-year low, fell by on third in 2011, and ethane (a liquid produced in natural-gas drilling) is at an 11-month low. The natural-gas and ethane glut translates to cheaper-than-normal ethylene, and recovered PE reclaimers must push bale prices lower in order to compete against low-cost virgin resin. Several energy analysts predict natural gas prices could drop another 25 percent by the end of the summer.

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