Recycled Plastic Market Slows? Largest Buyer and User in the United States Sees Purchase Share Drop to 3-Year Low

As the slogan of the circular economy resonates globally, the market has sent different signals. Advanced Drainage Systems (ADS), a giant in the U.S. drainage systems sector and a major consumer of recycled plastics, has seen its procurement data unexpectedly drop to a three-year low, pouring cold water on the booming recycled plastics industry.

ADS recycled plastic procurement volume has dropped to a three-year low.

According to the latest sustainability report released by ADS, the company's procurement of recycled plastics for the fiscal year 2025 has decreased to 501 million pounds (approximately 227,000 tons), a decline of 7.3% compared to the previous fiscal year, marking the lowest level since the baseline was set in fiscal year 2022.

The proportion of recycled materials in ADS's total raw material procurement also decreased from a peak of 50% in fiscal year 2024 to 46%, while the proportion of virgin resin was 49%. Specifically, the procurement structure is as follows:

• Virgin HDPE: 33%

• Recycled HDPE: 30%

• Native PP: 16%

• Recycled PP: 13%

• Other virgin plastics: 5%

• Other recycled plastics: 3%

Weak demand and excess virgin resin are the main reasons.

In addition, the proportion of recycled products in total revenue has also declined: from 51.1% in the previous fiscal year to 49.4%, a decrease of 7.8 percentage points compared to the fiscal year 2022. Within the revenue from pipeline products, the share of recycled products is 50.2%, down 3.5 percentage points from the same period last year and down 10.6 percentage points compared to the fiscal year 2022.

ADS attributes the decrease in procurement volume to the increase in the sales proportion of high-performance pipelines, which, according to regulations, can only use virgin PP. Additionally, the recycled HDPE market has been continuously facing challenges over the past 18 months: an oversupply of virgin PE and weak end-user demand have put pressure on resin prices.

ADS CEO Scott Barbour pointed out in the earnings call that despite the ongoing downturn in the residential construction market, large infrastructure projects (such as airport construction) have supported the company's revenue.

According to data from RecyclingMarkets.net, in August 2024, the price of colored HDPE bales fell to a historic low of 2.56 cents per pound and remained around that level in September. Despite facing market headwinds, ADS still expressed confidence in achieving its goal of purchasing 1 billion pounds of recycled materials annually by fiscal year 2032.

China's recycled plastic industry: Companies continue to enter the market.

While ADS procurement is contracting, China's recycled plastic industry continues to show an expansion trend. Recently, Ruichi Plastic Products Co., Ltd. in Jinjiang City launched a "30,000-ton annual recycled plastic granule production project," which has currently completed the second public announcement of the environmental impact assessment and is widely soliciting public opinions.

At the same time, Shanxi Wanshuo New Materials Technology Co., Ltd. is actively promoting the "Annual Comprehensive Treatment of 100,000 Tons of Plastic Resource Recycling and Reutilization Construction Project" in the Jiangxian Economic Development Zone. The total investment for this project is 320 million yuan, covering an area of 59 acres, and it is expected to be put into production by the end of this year. The company is positioned as a technology research and development enterprise, focusing on specialty plastics and plastic resource recycling. Its main clients include large manufacturing enterprises such as Gree Electric Appliances, BYD Auto, and Tianneng Battery.

Notably, the strategic moves of industry leaders are attracting attention. Sinopec has invested 200 million yuan to establish Sinopec Recycling Technology Co., Ltd. This initiative signals that the petrochemical giant is officially entering the plastic recycling sector in a high-profile and large-scale manner, aiming to integrate technology research and development with industrialization, promote the management of the entire plastic lifecycle, and inject strong momentum into the large-scale and standardized development of the entire industry.

Despite the short-term pressure on global markets, the long-term confidence of China's upstream and downstream industrial chains in the circular economy remains unshaken. Instead, they are accelerating their future planning in the face of adversity.

Breaking Through Adversity: Exploring New Blue Oceans in North America's Circular Economy

Despite the short-term cooling of the recycled plastic procurement market in the United States, the circular economy and green low-carbon transition remain long-term trends globally. The short-term market fluctuations provide visionary companies with an opportunity to reassess the landscape and gain insights into future trends.

At this critical juncture, engaging in face-to-face exchanges with leading enterprises, innovative forces, and policymakers in the heart of North America is more valuable than ever.

To this end, we are launching the "2026 North America Plastic Recycling Business Opportunity Exploration" tour. This delegation will attend conferences and conduct in-depth visits to various locations in the United States and Mexico, including San Diego, Los Angeles, Houston, Tijuana, and Las Vegas. The plan is to visit numerous plastic recycling and regeneration companies, equipment manufacturers, trading companies, and product companies using recycled materials. Through on-site research, discussions, and participation in exhibitions, members will gain a comprehensive understanding of the North American market dynamics, build high-quality business networks, and promote trade and technological cooperation between China and the U.S. in the field of plastic recycling.