How the Plastic Recycling Market Works & How Plastic Scrap Prices Are Set

How the Plastic Recycling Market Works & How Plastic Scrap Prices Are Set

By Michael Kralstein | Plastics Recycling

Feb 19

Over time, the plastics recycling market has grown and morphed into a booming business with significantly positive environmental implications. The plastic recycling market is also where  warehouses, distribution centers, and other businesses earn cash for their plastic scraps. Let's take a closer look at the plastics recycling market, how it works, and how the price of plastic scraps are determined.

The Basics of the Plastic Recycling Market

Every year, plastic products of varying types are manufactured from raw materials. Due to the manufacturing process, plastic develops into a highly-versatile material that boasts a range of attractive qualities, such as:

  • Lightness of weight,
  • Resistance to bacteria,
  • Flexibility and durability
  • And more

In spite of all of the amazing features of plastics, one of the main drawbacks is the material can take 1,000 years to degrade, which makes it a significant and growing environmental concern.

However, the plastics recycling market allows plastics to be reused over and over again. At AAA Polymer, we process and help businesses save money by implementing plastic recycling programs for the following types of recyclable plastic materials.  

  1. #2 High Density Polyethylene (HDPE)
  2. #4 Low Density Polyethylene (LDPE) -
  3. #5 Polypropylene (PP)

Learn the answers to some of the most frequently asked plastic recycling questions.

How Does the Plastics Recycling Market Work?

At AAA Polymer, we work with warehouses and distribution centers throughout the nation to create viable commercial recycling programs. Here's the process turning the plastic recycling market:

  1. The AAA Polymer team will visit your warehouse, distribution center, or business to deliver a free onsite survey — where we capture the facility's habits and needs.
  2. If determined necessary, AAA Polymer will assist with the installation of a bailing machine.
  3. Your facility collects the plastic stretch film scraps from incoming and outgoing pallets.
  4. Once your facility collects a substantial amount of plastic scrap, AAA Polymer will schedule a pickup and transport the scraps back to our facility for processing.
  5. The processing of the plastic scraps includes sorting, shredding, cleaning, melting and the creation of pellets. The plastic resin pellets can then be resold to manufacturers and redesigned to be used in the creation of new plastic products.

How Are Plastic Scrap Prices Determined?

One of the most common questions we receive at AAA Polymer is about the factors that influence the price of plastic scrap. Similar to any other commodity, there are a variety of market forces driving the price of plastic scraps.

Undoubtedly, shifting supply and demand of the market and the specific needs of plastic scrap buyers are key market drivers. In addition, the following factors can determine how plastic scrap prices are set.   

Plastic Quality Affects Prices

The clearer the plastic, the simpler it is to recycle. It is easier to sort and convert into a new product. The darker the plastic, the more difficult and expensive it is to recycle. Thus, the clearer the plastic, the better the price it will fetch.

Similarity of Plastic Type Can Determine Plastic Scrap Prices

If you have bales of a specific type of plastic, it may be considered more valuable than a conglomeration of similar-but-not-identical types of plastic. This is due to the sorting necessary to separate the different grades of plastic. Facilities can educate employees on recycling best practices to help optimize their recycling program.

Specific Manufacturer Needs Drive Prices

If a company uses a particular type of PCR resins in most or all of their products, they are more likely to pay higher prices for this plastic. This is especially true if scrap of the particular type  has become hard to find, which would drive the price of that scrap higher.

The Shifting Global Economy Affects Scrap Prices

As emerging economies around the world grow, the demand for recycled plastic resins will follow suit. This results in higher prices for plastic scrap, as manufacturers will be requiring ever more recyclable plastic to make their products.

The Price of Oil and Natural Gas Affects Plastic Scrap Prices

Since new plastics are made from oil — the price of the oil and natural gas used in virgin resins can drive the market for plastic scraps. When oil and natural gas prices rise, it will cause the price of plastic to increase. Increasing prices of natural resources makes it cheaper to recycle scrap plastic into products instead of formulating products from raw plastic

Contact AAA Polymer for Plastic Recycling

Instead of disposing your recyclable plastic materials through traditional waste management and paying fees to do so, AAA Polymer will help you develop a commercial recycling program to save your business money.

For more than four decades, AAA Polymer has led the way in commercial plastic recycling — working with a vast range of businesses across an array of industries.

Contact AAA Polymer today.

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About the Author

Michael Kralstein started working in sales full time for AAA Polymer in February 2000. In 2006, he became the Sales Manager of our can liner division. He currently manages all aspects related to can liners.

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