YTD 2022 US plastic scrap imports suggest overall decline from 2021, despite long-term growth trend

Emily Friedman

18-Nov-2022

HOUSTON (ICIS)–As the domestic US recycled plastics market continues to develop, responding to unprecedented demand from both state regulation and voluntary sustainability commitments from consumer brand companies, year to date (YTD) plastic scrap import data suggests 2022 volumes are running against the growth trend seen in the last several years.

According to trade data from the US Census Bureau, plastic scrap imports, noted by the HS code 3915, have been following an upward trend since 2012. Though Q3 2022, data shows that imports are down 8% quarter on quarter, and down 12% in comparison to Q3 2021, coming in at just 110,834 tonnes total.

YTD imports are currently at 341,731 tonnes, in comparison to a total of 467,546 tonnes in 2021.

Q3 2022, US trade data on plastic scrap material continues to show strong North American recycling activity, confirmed by the fact that Canada and Mexico continue to be the two largest import and export destinations for plastic scrap.

Nevertheless, even imports from Canada are likely to fall in 2022, a reversal of the trend since 2014. Volumes from Canada account for over one third the total US plastic scrap imports, totalling at nearly 128,000 tonnes YTD.

The slowdown in imports is likely correlated to the fact that US recycled polyethylene terephthalate (R-PET) and recycled polyethylene (R-PE) markets are currently experiencing demand softness and, thus, a temporary oversupply of material.

Demand for both recycled and virgin resins remains weak, as converters and retailers continue to work down existing inventories through the end of the year. This process has been extended by the fact that global goods demand has fallen on recessionary headwinds.

Furthermore, additional plastic scrap and recycled resin supply is now available, as players try to de-inventory their warehouses prior to the end-of-year deadline for tax evaluation.

In response, producers are cutting back on run rates, and potentially extending end-of-year shutdowns in conjunction with the typical slowness felt around the holidays.

As recyclers adjust to lower order volumes and a diminished outlook, several have noted the possibility of acquisitions, as some companies combat the difficult financial environment.

Long-term, both markets continue to suffer from systemic shortages in collected plastic waste. This has encouraged material imports globally.

Among the three top regions for import outside North America were Asia, Europe and Latin America. Among the top sending locations were countries like Germany, Honduras, Thailand, Ecuador, Taiwan and Indonesia.

Though 2022 imports will likely fall short of their previous trend, plastic scrap exports from the US continue to decrease as expected, showing an 84% drop when comparing YTD 2022 to total 2015 exports, prior to the enactment of the Chinese National Sword policy.

In comparison to last year, Q3 2022 exports are 22% less than Q3 2021, and down 9% quarter on quarter.

Plastic scrap derived polymers of ethylene, HS code 391510, continues to be a primary driver of US plastic scrap exports.

Canada and Mexico were also main destinations for exported scrap plastic, receiving over 50% of total exported plastic scrap YTD 2022. Although, total volumes of export material have fallen in 2022, despite increased volume shipments in the last several years.

Focus by Emily Friedman

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