Tariff uncertainty leads us recycled plastics market to become cautious

Affected by regulatory policy uncertainty, logistics costs, and tight supply, buyer behavior in different resin categories in the U.S. recycled plastics market has changed, leading to divergent price trends.

ICIS analysis indicates that some niche market trends are stabilizing, but supply issues and concerns over tariffs continue to affect short-term procurement strategies.

The latest analysis from global commodity intelligence firm ICIS shows that regulatory uncertainty and sharp fluctuations in feedstock costs are reshaping the U.S. recycled plastics industry. Significant price volatility across major resin categories is forcing market participants to adopt conservative short-term purchasing strategies.

Affected by tariff risks, persistently high logistics costs, and insufficient domestic production capacity, price trends in the recycled PET, high-density polyethylene, and polypropylene markets have diverged; some categories have stabilized after sharp pullbacks, while others continue to face supply challenges. These factors continue to influence buyer decisions and market price movements.

The recycled PET market as a whole remains cautious.

ICIS Senior Analyst Corbin Olson said that in the recycled PET (rPET) sector: “An increase in seasonal collection volumes has expanded feedstock supply, putting pressure on bale prices; however, persistently high fuel, labor and transportation costs continue to support delivered prices.”

Corbin Olson said: “Flake prices are supported by import substitution costs. High freight rates, insufficient domestic capacity, coupled with tariff uncertainty, have offset the pressure brought by weakening feedstock fundamentals. Pellet prices continue to move in line with changes in flake feedstock costs, while tightening processing margins have compressed purchasing room and limited the upside for feedstock prices.”

Corbin Olson noted that unresolved Section 301 actions, overcapacity investigations, and uncertainty stemming from the USMCA have continued to delay purchasing decisions, further reinforcing the market’s short-term buying pattern.

He stated, "Changes in tariff policies, high logistics costs, and dependence on imports will continue to affect prices, and market participants are expected to remain cautious."

The recycled high-density polyethylene market is showing signs of stabilization.

ICIS Senior Editor Craig Fisher explained that prices across the recycled high-density polyethylene value chain have fallen sharply from their mid-May peaks, driven by a combination of declining virgin polyethylene prices, improved feedstock supply, and weaker seasonal demand. “However, since early July, the pace of price declines has clearly slowed; renewed tensions in the Middle East have driven energy prices higher again, curbing any further downside.”

Craig Fisher stated, "The significant adjustment that began in June is gradually dissipating, and the price of high-density polyethylene packaging materials stabilized at the end of July. Buyers of packaging materials remain cautious, facing weak demand and a pessimistic outlook for short-term price recovery, only purchasing goods to meet immediate production needs."

In July, the price of recycled high-density polyethylene (rHDPE) pellets continued to face slight downward pressure, but the decline narrowed in the second half of the month.

Craig Fisher pointed out: “The recycled LDPE market is relatively balanced, with feedstock and pellet prices remaining stable. The price of natural-color recycled LDPE pellets remains unchanged, and the premium on recycled materials has returned to historical normal levels.”

Polypropylene faces supply challenges

Craig Fisher also noted that the price of mixed-color polypropylene baled material more than doubled from February to May, but fell back significantly in June and July, and is now down 50% from its May peak.

"Stable high-quality recycled polypropylene supply remains tight," Craig Fisher stated. "Polypropylene packaging accounts for a small proportion of overall packaging materials, and the amount of polypropylene collected by community curbside recycling systems is very low, making it difficult to alleviate the supply issue of recycled polypropylene."

The price of natural recycled polypropylene pellets has decreased by 15%-20% from the mid-May peak, but is still 15% higher than the same period last year.