*Producer price index is based on December 1980 average prices as 100; source: U.S. Bureau of Labor Statistics

According to a Chicago-area reclaimer of recovered plastics from industrial and commercial sources, there is a shortage of high-grade materials, while inventories of low-grade recovered plastics continue to grow. Markets for this material have all but disappeared, according to sources.

That disappearance has arisen from China’s ban on eight types of postconsumer plastic scrap, which is scheduled to go into effect in 2018, and from its reduction in issuing import licenses for plastics scrap, a situation that has been vexing U.S. exporters for most of the year.

A waste management consultant and broker based in the Great Lakes region says his primary buyer in China was able to find a couple of licenses in October to buy loads from him that month. But licenses are running low, and shipments from the U.S. to China are few and far between, even for the industrial grades the broker handles.

He says he thinks postindustrial plastic scrap shipments will begin moving again in the first quarter of 2018 as licenses for the year are issued.

Issues shipping to China are restricted to plastics scrap. Repro and new rolls of film still can be shipped into the country, the broker says.

In addition to focusing more on domestic buyers, he says his company has had to change its buying habits because of the situation with China. The broker says he’s buying material he knows he can sell domestically.

He adds that he’s had to ask himself whether it makes sense to fill his warehouse with material he can’t move right now but can buy at a cheaper price or if he should landfill material. “I’ve had to landfill a lot of stuff.”

Regarding consumers of recovered plastics within China, he says, “The funny thing is they can take it, but the government won’t let them take it. There’s a big shortage of scrap over there right now.”

While the broker says he believes the situation in China will improve in the year ahead, he adds, “No one really knows what they are going to do before they do it.”

The broker says he’s able to move postindustrial polycarbonate (PC), acrylonitrile butadiene styrene (ABS), PC/ABS and acetal as of late October. But, he adds, “If you’re in the postconsumer business, you’re screwed.”

Regarding exports to China, the broker says, “The cheaper the polymer, the harder it is to move the scrap.” This is because the cost of the import permits is making the overall cost to import the material to China prohibitive.

“I work with clean, good scrap. I’m cautiously optimistic,” the broker says of his outlook toward China’s plastic scrap buying in 2018.

When it comes to the loads of plastic scrap he’s moving domestically, he says transportation is “brutal” right now. He attributes this to trucks still being diverted to hurricane relief efforts, which is amplifying the trucking shortage.

“For every 6.7 loads available on the market, there is one trucker,” the broker says. “They can pick and choose who is going to pay the most.”

He adds that trucking rates have risen by 30 to 40 percent.

Capacity on rail lines also is tight, the broker says, though it can offer a less expensive but slower option to trucking.