May/June 2011
Though many scrap processors started handling plastic film at their customers’ behest, they now count the material as a valuable addition to their portfolio of recycled commodities.
By Kent Kiser
Those in the scrap industry know E.L. Harvey & Sons (Westborough, Mass.) primarily as a paper recycler, but over the years the company has broadened the array of recyclables it handles—from metals to electronics to construction and demolition materials—to create more revenue streams and add value to the services it provides to its scrap recycling and solid waste customers. That’s how the company found itself in the business of recycling plastic film. “We were picking up OCC bales from customers, and they asked us to recycle the plastic film they were generating,” says Paul Degnan, the company’s director of plant operations. “Once the [first] customer pushed us, we looked at our own film in the waste stream and started recovering that as well.”
Some 10 years later, E.L. Harvey now counts plastic film as a consistent segment of its material stream, and it’s not alone. Many other recyclers say they started handling the material as a service for suppliers who want a single company to take all of their recyclables—the one-stop-shop approach—and who want to minimize what they send to the landfill. For some, it began as a necessity. “At first, if we wanted to service accounts that had paper, they often asked us to take their plastic, too,” says Kathy DeLano, vice president of sales for Texas Recycling/Surplus (Dallas). It didn’t take the company long, however, to turn that necessity into an opportunity. “We welcome their plastic now,” she says. Similarly, Doug Padnos, manager of paper and plastics for Louis Padnos Iron & Metal Co. (Holland, Mich.), notes that “some of our customers asked if we could handle plastic film. When we realized we could, we started encouraging other customers to collect it and had our sales reps solicit the material.” Still others saw demand from the material’s consumers before they had sufficient supply. City Carton Recycling (Iowa City, Iowa) already handled stretch film for its industrial accounts when a manufacturer of plastic lumber asked it to recover plastic grocery bags, too. Likewise, Sandy Rosen, president of Great Lakes Recycling (Roseville, Mich.), says his company started handling most of its recyclables—including plastic film—“because someone asked us to handle them or because buyers sent us requests that we matched up with material.”
Though plastic film might not be the biggest kid on the scrap block, it has become a valuable additional commodity for many scrap processors. It allows them to enhance their customer service, divert more material from disposal, and make a few bucks in the process. Here’s a look at the ins and outs of this growing market.
Film Fundamentals
Plastic film is the industry term for any plastic less than 10 mil, or 0.01 inch, thick. Most plastic film is made of polyethylene, including low-density, linear low-density, medium-density, and high-density PE. Each of the different resins gives the film unique characteristics to suit various applications. Most industrial stretch film, for instance, is made of LLDPE, which is elastic and waxy to the touch, whereas many consumer bags—including common grocery, or carryout, sacks—are LDPE or HDPE, which are stiffer and make a crinkly sound when handled.
Scrap recyclers handle an array of plastic film, including clear industrial stretch film, printed grocery bags, agricultural film, and even boat wrap. City Carton, for example, collects and processes film from its industrial accounts, public drop-off containers, and curbside collection operations. Notably, the company collects both stretch film and postconsumer grocery bags from the Fareway grocery store chain, which has 98 locations in Iowa, Illinois, Minnesota, and Nebraska, says Joe Hummel, the firm’s customer service representative for nonfiber marketing. City Carton has installed specially branded containers at the stores for consumers to drop off not only grocery bags but also plastic bags from produce, newspapers, bread, and dry cleaning. Fareway backhauls the collected plastic film from each store to its corporate distribution center in Boone, Iowa, where it bales the postconsumer film with its stretch film. City Carton then picks up the film bales from the distribution center about once a month.
Scrap recyclers say they prefer to have plastic film baled at its generation point whenever possible to maximize transportation efficiencies. “It’s logistically challenging to pick up unbaled material because it’s so light,” Padnos says. That’s a big reason why City Carton installed a baler at Fareway’s distribution center: It made the pickup of film cost-effective, Hummel says. That’s also why Wal-Mart (Bentonville, Ark.) began producing the trademarked Plastic Sandwich Bale at many of its stores. To create the bales, each store sandwiches shrink wrap, plastic bags, apparel bags, and other loose plastic between two layers of OCC. The process makes the material more economical to transport for recycling, the firm says.
When on-site baling of plastic film isn’t possible, recyclers try other options, such as picking up the unbaled plastic film with other commodities (such as OCC bales) to reduce the net cost of hauling the material. As a last resort, they will haul unbaled film by itself and either absorb the transportation cost or—as in E.L. Harvey’s case—have the generator pay the freight. “We’ll haul it back here and give the customer a rebate based on the material’s market value,” says Ben Harvey, the company’s president.
Of Specs and Quality
There are no standard, industrywide specifications for recovered plastic film, in part because the market is still in its developmental stage. Also, the many varieties of film that get collected and sold together in one bale make it difficult to create distinct grades. Even plastic film made from the same polymer can vary in density, thickness, color, and additives, notes Dave Heglas, director of materials resources for Trex (Winchester, Va.), a manufacturer of wood-polymer lumber. Another barrier to establishing standardized specs is that end users have vastly different raw material requirements; thus, many have their own specs to suit their particular operations. “It wouldn’t hurt to have some standardization, but it’s tricky,” says recycling industry consultant Ronald Sherga, CEO of SherResults (Arlington, Texas). “One man’s ‘I can’t use it’ is somebody else’s ‘Ship it tomorrow.’ I think specs are needed, but it’s not as compelling with plastic film as with other commodities.”
With the lack of standardized specs, recyclers offer different grades based on their supply sources and end-use markets. Padnos Iron & Metal, for example, produces six grades of plastic film, starting with mixed-color film on the low end and 99/1 clear stretch film, which is 99 percent clean, on the high end, the company says. In general, grocery bags tend to be a “very, very low grade” because of their mixed colors, mixed resins (usually LDPE and HDPE), thin gauge, contamination level (especially paper receipts), and printing. Colored shrink wrap is a step up in value, and clear, clean stretch film has “a price advantage,” Padnos says.
The quality of the plastic film depends largely on its source. Plastic stretch film from a warehouse—what one recycler calls “A-grade film”—tends to be cleaner and more uniform than film collected from public collection sites such as grocery stores. That’s not always the case, of course. Some warehouse operations—such as food distributors—can generate plastic film with unacceptable organic contamination levels. “The material often isn’t clean,” DeLano says. “There must be no food residue on it.” In addition to looking for organic contamination, users of recovered plastic film check for contaminants such as paper receipts, adhesive paper bar-code labels, and—increasingly—multilayered barrier film that combines PE with other resins. “Those films are difficult to recycle because you’ve got two dissimilar plastic polymers together,” Heglas says. The use of biodegradable additives in plastic film is another growing concern, he adds.
Also affecting plastic film’s quality is how it’s stored and, especially, its moisture level. “Film needs to be kept dry—the drier, the better for its value,” Harvey says. “Not only can moisture create production problems for end users, they also don’t want to pay for moisture when buying film.” It’s important, therefore, to store plastic film indoors, both before and after processing. DeLano recounts that she once saw some bales of plastic film that had been outside for so long that they had plants growing out of them.
Tom Outerbridge, general manager of Sims Metal Management’s municipal recycling division (Jersey City, N.J.), knows all about plastic film contamination problems. He sees hundreds of tons of plastic film every month, and the company must landfill it due to contamination. The film comes into the company’s facilities in New York City and Jersey City from New York’s curbside collection program, which is not designed to collect film. (Instead, the state requires certain retailers to collect and recycle the material.) Still, the curbside program receives a panoply of film varieties—from grocery bags to “oddball things” like shower curtains and huge sheets of plastic that wrapped mattresses, he says. More problematic than the diverse mix of products and resins, however, is the fact that the plastic film is contaminated by moisture from beverage containers and food residue from containers in the commingled recycling stream. As a result, the plastic film “is really not a marketable product, at least not in its current form,” Outerbridge says. The company expends much effort to separate the plastic film from the higher-value commodities. Though Sims is always researching processing options to make the film a marketable product and market options for the material, it does not expect the film to ever have the value of film collected separately, such as through grocery store programs, Outerbridge says.
Great Lakes’ Rosen can relate to Sims’ situation because his own company operates two single-stream MRFs that also deal with postconsumer plastic film. In its operations, hand sorters remove plastic bags and other film at the pre-sort stage and feed the material into a vacuum system, which empties into a small baler. The recovered film has some of the same moisture and food contamination concerns as the material the Sims facility handles, but Rosen has found markets for his material. He concedes that “it’s a little harder to find homes for MRF film. The cleaner it is, the easier it is to move.”
Sherga suggests that contaminated plastic film could find beneficial use as a waste-to-energy fuel thanks to its high Btu value. “The energy value of discarded plastic film is huge,” he says. “Discarding it is putting oil in the ground.”
Processing Pros and Cons
Beyond contamination concerns, one of the biggest challenges of handling plastic film is its voluminous nature: It simply takes up a lot of space until it’s baled. “Volume is a challenge,” Degnan says. One Gaylord container packed full of plastic film can weigh just 40 pounds, recyclers say, so it can take 20 Gaylords to make a single 800-pound bale, 30 to make a 1,200-pound bale, and so on. That number of Gaylords can fill up a warehouse fast. Recyclers handle this storage challenge in various ways. Padnos Iron & Metal has a “big holding area” for its loose film, Padnos says, while E.L. Harvey stores its film in roll-off containers prior to processing, saying it can get one or two 1,400-pound bales per roll-off. City Carton used to accumulate plastic film in a dedicated vertical baler and compact the material each day until it created a full bale; now it stores the material in Gaylords prior to processing.
Recyclers use a variety of baler brands and models to process plastic film—both vertical and horizontal designs—and they produce bales of varying weights, from 600 pounds up to 2,000 pounds. Degnan asserts that a channel-style, open-end baler is the best machine for processing film because it ties the bales side to side and front to back. To get maximum weight when shipping the material, recyclers sometimes break smaller bales to create larger, heavier bales. Great Lakes, for instance, makes 900- to 1,000-pound bales of film recovered by its vacuum system, then it rebales the material in its larger Bollegraaf cross-tie baler to produce 1,600- to 1,700-pound bales.
Plastic film can be difficult to bale, Rosen says. First, the “collective memory” of thousands of plastic bags can prompt the material to expand as it emerges from the baler, making it difficult to tie effectively. That memory and the slippery nature of plastic film also makes the material “want to come out of the bale,” he says. Also, if one of the wire ties is tighter than the others, it can put uneven pressure on the bale, making the bale bow and break open, Rosen says. One way to prevent this problem is to wrap the bales with stretch wrap as they come out of the baler. A final processing challenge is that plastic film can get caught up in a baler’s wire-tie mechanism, resulting in downtime and, possibly, equipment damage, Rosen says.
The Sales Equation
With the contamination, storage, and baling headaches of plastic film, some might wonder why recyclers bother to handle it. The good news, these companies say, is that the material—especially clean material—has solid markets. “Moving our material has never been a problem,” DeLano says. “I get calls almost daily.” Harvey and City Carton’s Hummel both confirm that they receive regular inquiries for film as well.
The challenge, recyclers say, is vetting the potential buyers to make sure they’re legitimate. “We’re really picky about who we work with,” DeLano says, noting that Texas Recycling/Surplus prefers to have interested buyers visit its plant first to “take a look at our quality and make an offer.” A lot of the prospective buyers don’t want to bother with a visit, she says, which is “a good way to weed them out.” Hummel also is cautious with new buyers, especially those serving the export market. “If their address is in a strip mall or they list their office as being on Wall Street, you have to be suspicious,” he says. “It’s not unusual for such players to be here one day and gone the next.” For these and other reasons, it’s important to conduct credit checks and call references of prospective buyers. “Treat the situation no differently than when you’re hiring someone to work for you,” Hummel says.
Fortunately, legitimate buyers exist in a variety of industries and countries. The recovered film might get repelletized and sold as feedstock, or it might go directly into the manufacturing process to make items such as plastic lumber, lawn and garden products, pallets, crates, piping, automotive products, and new plastic bags. In the United States, plastic lumber is the largest single market for recovered film, claiming a 20-percent share of the domestic total, while 7 percent goes into the film and sheet category, according to a report from the American Chemistry Council (Washington, D.C.). In the export market, China is the largest international consumer of recovered U.S. plastic film, in part because it has the labor to sort mixed film. “There, they open up the mixed bales, put the material on a 100-yard conveyor with 50 people lined up on each side, sort the material, and remove the contaminants,” Sherga says.
Most scrap processors who handle plastic film sell their material to both domestic and international buyers, with the percentages varying based on market conditions, their mix of plastic film, and their location. Texas Recycling/Surplus sells about half of its film to U.S. outlets and half to export markets, while Padnos Iron & Metal sells about 25 percent domestically and the balance internationally. City Carton sells all the plastic film it collects from the Fareway grocery stores to Trex; it exports the plastic film from its sorting lines and drop-site bins. The company prefers to sell its exported film to firms with which it already has an established trading relationship, Hummel notes.
Pricing Particulars
Just as there are no standard specifications for recovered plastic film, there’s little price guidance for the material, recyclers note. Plastics News, a weekly publication for the plastics trade, offers two price references for film: one for high-molecular-weight HDPE postconsumer film and one for LLDPE stretch film, both in pellet form. Beyond those published prices, recyclers must establish prices for this material in other ways. Pacific Metals Recycling International (Vancouver, British Columbia) sells its mixed film to buyers in several regions in China. “They all have factory buying prices,” says Antonio Chow, the company’s manager of international trade. “They’ll say they are buying this type of plastic at this price, so we have a handful of prices to review.” E.L. Harvey takes the same approach. “We look at it as a spot market,” Harvey says. “When we have material to sell, we offer it to a few users and see what prices they offer.” Offering a consumer’s perspective on prices, Trex’s Heglas says that “there are different indicators you can review”—such as U.S. and world economic news and virgin PE supply and demand—“but they’re not all a direct correlation to plastic film prices. You have to look at a number of different factors to figure out a fair price.”
As with all commodities, plastic film prices can range widely, depending on market conditions and the material’s type and cleanliness. Prior to the 2008 market crash, the material was fetching 20 to 25 cents a pound, according to some recyclers. During the downturn, the values plummeted to 4 or 5 cents a pound, they say. At that level, Hummel concedes, “it’s pretty much a break-even deal if you figure in transportation, handling, and processing.” In the past year, the market has regained strength. “It’s not the highest it has ever been, but it’s back to 80 to 90 percent” of what it was before the recession, Rosen says. Several recyclers note that the rising price of crude oil has boosted the plastics market, including plastic film. “With the increase in oil prices,” Padnos notes, “anything made of polyethylene has pretty significant value.”
Recyclers can maximize the value of their plastic film by educating suppliers on contamination issues. The basic rule is, the cleaner the material, the higher the price it can fetch. Recyclers also can boost the value of their film by sorting the material and offering a package that meets consumer requirements. “Understand your end user—what they can use and can’t use—and try to tailor the package to the customer’s specs,” Padnos says.
Looking ahead, recyclers expect demand for recovered plastic film to continue growing for a variety of reasons, including greater public pressure to recycle plastic bags, expanding interest in zero-landfill efforts among manufacturers and other film generators, and rising demand for recycled material from domestic and international consumers. “In recent years, there’s been an increasing awareness about recycling plastic film,” Heglas says, noting that the infrastructure to collect plastic bags from the public is growing steadily. “If people start participating, we could really start pushing the dial.” Sherga also is bullish on the future of plastic film recycling. “There’s no denying this market has to grow,” he says, “and much of it will be driven by price concerns related to virgin polyethylene.”
Given such growth prospects, recyclers who handle plastic film have this advice for their colleagues: Don’t be afraid to accept the material if a supplier or buyer asks you to do so. “We started out handling plastic film because customers requested it,” E.L. Harvey’s Degnan says. “Now we’re handling it because it has a value and reduces what we [send] to landfill.” The key, Harvey adds, is to “do your homework—know your markets, understand your transportation logistics, know your handling and processing costs as well as how to maximize the value of the material.” Then plastic film can be a beneficial, valuable addition to one’s material mix. “We’re going to keep recycling it,” says City Carton’s Hummel. “We’re in it for the long haul.”
Kent Kiser is publisher and editor-in-chief of Scrap.
Plastic Film Recycling by the Numbers
For the past five years, the plastics division of the American Chemistry Council (Washington, D.C.) has funded a survey of plastic film recycling in the United States. Though Moore Recycling Associates (Sonoma, Calif.), which conducted the surveys, concedes that the reports likely do not capture the entire plastic film recycling market, the results are the best available.
The most recent report, for 2009, notes that the United States recycled a record 854.4 million pounds (427,500 tons) of plastic film, up almost 3 percent from 2008. Of that total, commercial film recovery increased 18 percent, but recovery of most other film grades decreased based on reported totals from buyers.
For the third year in a row, the majority of the collected film—490.7 million pounds, or 57 percent—was exported. Prior to 2007, the majority of collected film was consumed domestically. Domestic consumption did rise slightly in 2009, from 362.4 million pounds in 2008 to 363.7 million pounds. The overall trend since 2006, however, has been a decline in domestic consumption of recovered film.
Stretch film was 71 percent of the film recovered, with mixed film accounting for 25 percent; curbside film, 2 percent; dirty and clean agricultural film each claiming 1 percent; and other (mostly polypropylene) accounting for 1 percent, the survey says.
There are an estimated 12,000 locations in the United States where consumers can recycle their plastic bags and product wraps, many at grocery stores and retail chains such as Target, Lowe’s, and Wal-Mart, the report says.
The survey results, titled 2009 National Postconsumer Recycled Plastic Bag & Film Report, are available as a free download at www.plasticbagrecycling.org.
Though many scrap processors started handling plastic film at their customers’ behest, they now count the material as a valuable addition to their portfolio of recycled commodities.