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RE: [greenyes] Shortage of R-PET - Role of embedded energy

Hi Doug ~

I am not sure about the plastic scrap prices vis-a-vis rising petroleum
prices, although I would think there is a correlation, with a subtraction
for transportation. Transportation is a significant issue for PET, because
there are relatively few processors in the US, meaning long travel distances
for some recyclers.

For paper and steel cans, it seems to me that other factors (demand from
China, or changes in that demand) have a bigger role. For example, our
prices for steel cans are now down to $70 a ton from $160 a ton in November,
with prices widely fluctuating for the last year and a half. Paper prices,
however, have been fairly stable.

For glass, the rise in petroleum prices have been a big negative. Due to
increased transportation costs, the net that we get at our MRF for clear
glass has dropped from $11 a ton last fall to $4.50 a ton. For green, we pay
$11.50 a ton FOB the MRF to get it recycled. And mixed costs us $20 a ton.


> -----Original Message-----
> From: Doug Koplow [mailto:koplow@no.address]
> Sent: Wednesday, May 04, 2005 8:33 AM
> To: greenyes@no.address; anderson@no.address
> Subject: Re: [greenyes] Shortage of R-PET - Role of embedded energy
> Anybody have a guess as to the importance of spiraling energy
> prices in driving the demand for recycled PET?
> PET, along with other recyclables, have quite a bit of
> embedded energy that can be recovered through recycling. Are
> prices rising and demand surging for other high-energy
> content fractions like metals, other plastics, and paper as well?
> _______________________________
> Doug Koplow
> Earth Track, Inc.
> 2067 Massachusetts Avenue - 4th Floor
> Cambridge, MA 02140
> Tel: 617/661-4700
> Fax: 617/354-0463
> This message, and all attachments thereto, is for the
> designated recipient
> only and may contain privileged, proprietary, or otherwise private
> information. If you have received it in error, please notify
> the sender
> immediately and delete the original. Any other use of the
> email by you
> is prohibited.
> >>> "Peter Anderson" <anderson@no.address> 05/03/05 05:36PM >>>
> PLASTICS NEWS - May 2, 2005
> Recycled PET shortage serious, growing
> By Joe Truini
> AKRON, OHIO (April 27, 4:30 p.m. EDT) -- Recyclers and
> recycling advocates
> could be missing a golden opportunity to improve sagging
> plastic bottle
> recycling rates significantly.
> Since humans began roaming the earth, demand often has
> dictated supply.
> Basically, if someone wants something, there is someone else
> willing to
> provide it - for a price.
> But demand for recycled PET containers from carpet makers, beverage
> companies, strapping manufacturers and overseas buyers is
> outpacing supply.
> Recovered PET prices have reached an average of about 25
> cents per pound,
> but that premium still hasn't been enough to increase
> container recovery.
> "We're playing musical chairs right now in the PET recycling
> industry, with
> 10 players and seven chairs," said Phil Cavin, national
> procurement director
> for carpet maker Mohawk Industries Inc. "Everyone right now is just
> scrambling to get material, and prices are through the roof."
> Mohawk, based in Calhoun, Ga., is one of the nation's largest
> PET recyclers.
> The company uses recovered material in its carpeting and is a
> major supplier
> of recycled PET resin.
> Dropping fast
> Despite the strong market and increased demand, the 2003
> recovery rate for
> plastic soda, water and other PET bottles fell for the eighth
> consecutive
> year since 1995. That year, the United States recovered 39.7
> percent. But
> that rate sunk to 19.6 percent in 2003, according to the National
> Association for PET Container Resources in Charlotte, N.C.
> "There's plenty of bottles to go around, but they're just not being
> collected," Cavin said. "It's terrible right now. Nobody sees
> any relief in
> sight."
> In 2003, U.S. recyclers produced 667 million pounds of clean
> flake from
> recovered post-consumer PET bottles, exporting 255 million
> pounds of that,
> according to NAPCOR.
> That same year, U.S. manufacturers consumed 552 million
> pounds of recovered
> PET. Fiber product manufacturers, which include carpet
> makers, led the pack,
> using 296 million pounds. Food and beverage bottle
> manufacturers consumed
> 106 million pounds, and the strapping industry 77 million
> pounds. Sheet and
> film producers, nonfood bottle makers and engineered resin
> producers used 32
> million, 24 million and 10 million pounds, respectively. Some
> 7 million
> pounds were consumed by other sources.
> It is not a new issue, said Mike Shedler, NAPCOR vice president of
> technology.
> "We've had a demand imbalance for quite some time," he said.
> "There have
> been meetings and committees and studies and everything else
> that people
> have talked about over the years in terms of how we can
> address supply
> issues. Not a whole lot, though, has happened."
> Stuck in the middle
> Many people agree that container-deposit laws, or bottle bills, are
> effective in recovering PET bottles, but stakeholders are
> split on their
> support, said Pat Franklin, executive director of the
> Container Recycling
> Institute in Arlington, Va. Beverage manufacturers, the
> grocery industry and
> retailers oppose bottle bills.
> Recyclers are stuck in the middle, Franklin said. Major
> beverage companies
> are their customers, whether buying processed material from
> recyclers or
> selling them recovered bottles, she said.
> "It's like they've got a gag order," Franklin said.
> Recycling advocates praise the effectiveness of bottle bills.
> The 10 states
> that have had deposit laws running for some time - Hawaii,
> the most recent
> state to pass deposit legislation, just started its program
> this year -
> collect about three of every four bottles consumed, she said.
> Recovery rates
> can reach higher than 80 percent in those states.
> "You're looking at single-digit recycling rates in
> nonbottle-bill states,"
> she said.
> No consensus
> And over the past six to nine months, virgin PET price increases have
> created even more demand for alternative raw materials,
> including recovered
> PET, said Shedler of NAPCOR.
> "There's no question we need more supply out there," he said.
> "The issue is
> that no one can agree on just how to do it."
> And the incredibly high demand for strapping, which is used
> to secure a
> range of products such as baled materials, could add to the
> need for more
> PET, Shedler said. Strapping manufacturers are adding
> capacity to fill
> orders, as most of them are sold out of product.
> "We could essentially double the demand for strapping in the next 12
> months," he said. "That would put the strapping segment, in terms of
> [recovered PET] content, very close to where the carpet
> industry is today."
> You just might get what you wish for
> In 2000, recycling advocacy groups led by the GrassRoots
> Recycling Network
> started pressuring Coca-Cola Co. and PepsiCo Inc. to use more
> recycled PET.
> That year, Coke officials agreed to start using 10 percent
> recycled content
> in billions of the company's bottles.
> In 2002, PepsiCo officials outlined a goal to use 10 percent recycled
> content in their firm's containers.
> But those environmental community victories are putting recyclers and
> processors on the spot to come up with enough material for everybody.
> Coke and Pepsi together are consuming in the neighborhood of
> an additional
> 200 million pounds of recovered PET bottles or so per year,
> according to
> recycling industry estimates.
> The additional demand has led to shortages of 100 million to
> 200 million
> pounds per year, according to Cavin.
> "...
> "...
> "...
> "...
> _________________________
> Peter Anderson, President
> 4513 Vernon Blvd. Suite 15
> Madison, WI 53705-4964
> Ph: (608) 231-1100
> Fax: (608) 233-0011
> Cell: (608) 698-1314
> eMail: anderson@no.address
> web:
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