Attached is your PO for deliveries of ResMix for the month of November 2019.
The market for recyclables in November has moved (on an overall basis) little since October. While cardboard continuedits slow seasonal slide lower,HDPE plastic as well as the metal grades have moved higher.
The story for HDPE plastic is very enlightening and offers clear support for the value of recycled content mandates as well as confirming our central market thesis that the supply of residential recyclables is inelastic (or vertical). As for the story,as I am sure you are aware, there has been an avalanche of negative stories in the media regarding plastic especially about the growing quantities of plastic floating in the Pacific Ocean. The negative press has motivated the plastic industry to consider or adopt at least some adjustments including experimenting with secondary plastic recycling in Portland this past summer and public commitments from multiple plastic users including Coca Cola, Pepsi and Proctor & Gamble to drastically increase the percent of recycled content used to manufacture their plastic bottles.
These content commitments are the root of a full doubling of the price for HDPE Natural (milk jugs) as compared to their value this past Spring. The change in recycled content required created a dramatic shift in demand (to the right) for recycled plastic pellets and, most importantly, only recycled pellets. The shift in demand “vaulted” the value of scrap HDPE strait up the supply curve in just two months to the doubling in value that we now are enjoying. This change has been so dramatic that recycled pellets now sell at a higher price than virgin pellets despite the fact that recycled pellets are harder to work with. This is good news indeed.
With regards to the future, we expect that the market in the near term will be dominated by the normal seasonal factors related to the end of the harvest and Christmas packaging seasons although we remain hopeful that the announced expansion projects in Port Townsend,Port Angeles and NORPAC will come on-line sooner rather than later and allow our area to emerge from these seasonal factors earlier than expected.
We remain very optimistic for the mid to long term because there are just too many announced paper mill expansion projects in the works to ignore. When these projects are completed pricing for recycled paper will have to respond.
As always, rest assured that Pioneer will be working overtime to get the best pricing available in the marketplace each and every day. We appreciate your business.
PS. – Please note our Holiday work schedule below.
Thanksgiving– closed. We will be open for deliveries the following Saturday Nov 30th
Christmas Eve– we will close for deliveries at 5 PM
Christmas Day– closed. We will be open for deliveries the following Saturday Dec 28th
New Year’s Eve– we will close for deliveries at 5 PM
New Year’s Day– closed. We will be open for deliveries the following Saturday Jan 4th