Andrea Bassetti, recycled plastics analytics lead at market intelligence firm ICIS, lays out factors driving recycled resin markets at the 2025 Plastics Recycling Conference. | Photo Credit: Big Wave Productions/Resource Recycling, Inc.
Analysts from market intelligence firms emphasized the lack of solid footing and stiff competition from virgin resin and imports as key challenges for the plastics recycling market, during sessions at the recent Plastics Recycling Conference.
“The one word you’re going to be hearing over and over again for the next three days is ‘uncertainty,'” said Emily Friedman, senior editor for U.S. recycled plastics at ICIS. Market intelligence firms ICIS and Chemical Market Analytics each presented a session during the conference, which was held by Resource Recycling Inc., publisher of Plastics Recycling Update, last month in National Harbor, Maryland.
In the U.S., mechanical recycling capacity stands at 7.5 million metric tons a year, and 2024 output was 3.3 million tons, higher by 3% from 2023, said Corbin Olson, senior analyst at ICIS.
Of that capacity, 32% is HDPE, 29% PET, 24% PP and 15% LDPE.
Chemical recycling capacity is around 300,000 metric tons among about 20 operating facilities, Olson added.
Recycled plastics continue to be priced at a premium to virgin material, Friedman said. Natural HDPE prices are about 200-300% higher than prime resin, as a result of demand that exceeds the limited supply of post-consumer material and brand willingness to pay the higher price. In RPET, the premium to virgin material has stabilized at around 30-35%, she said, citing the established global market that can supply imported material to balance the U.S. market.
In a poll during the session, participants indicated a mostly pragmatic approach to imports, recognizing that U.S. capabilities are structurally short compared to demand requirements. However, although imported material could present the only available option to reach price parity, Friedman said, dumping materials could stifle domestic market growth.
“It’s up to the market to determine how it grows around imported materials,” she added.
Pricing for imports previously was much lower than domestic material but now largely is at parity, Friedman said. But imported material may be cleaner due to differences in collection and processing techniques in other regions. In general, RPET pricing is now decoupled from virgin resin and correlates with bale pricing movements, she said.
Looking ahead, the key influences on ICIS forecasts are tariffs and imports, weather that disrupts collection, domestic investment in capacity, and macroeconomic and policy factors.
And while U.S. legislation and sustainability commitments are fragmented, they are gaining momentum, said Andrea Bassetti, recycled plastics analytics lead at ICIS. However, brand commitments are the strongest driver for U.S. demand for recycled material, with consumer goods companies adjusting their voluntary targets to set a “realistic pace,” she said.
Challenges from virgin polymers to continue
Despite decoupling from virgin pricing, the RPET market still faces existential threats from cheap imported prime resin, which the U.S. requires to meet demand. But even with tariff pressures, new capacity is unlikely, said Robert Ribeiro, vice president of ethylene oxide derivatives and PET at CMA.
The long-planned Corpus Christi Polymers joint venture sits partially built after construction was paused in 2023, but now the technology is outdated and the capacity is small compared to new plants in Asia, he said. Likewise, Alpek’s Cooper River plant in South Carolina – closed in 2023 – is small and inefficient, so is not likely to be restarted, he added.
In contrast, PE has seen some of the final capacity expansions that exploit the domestic shale gas boom come online in the past two to three years, primarily for HDPE and LLDPE, said Joel Morales, vice president for Americas polyolefins at CMA.
And as has been the case for at least two years, PE and PP supply far outstrips consumption, Morales added. This has led to depressed pricing for virgin resin that has dampened demand for recycled HDPE.
U.S. PE is significantly exposed to the tariff war, with mainland China, Mexico and Canada among the top-five export destinations, Morales said. Overall, CMA continues to expect a historical, extended down cycle for PE.