We see polypropylene going up .02 – .04 / pound in November and should be flat in Dec. There is a large amount of PP/HO repro on the market right now but pricing is still high for repro but should remain flat through 2012. That being said, it is what it is and the scrap market is caught up finally so we should see some leveling out for the processors and buyers.
For a long time I never gave thought to the amount of laundry detergent used at home. That would be the one home chemical which the old philosophy of “more is better” always applied to my laundry habits. This surprisingly contradicted the managerial habits I developed watching costs as part of a hospitality management team. Unsupervised, I would discover that a 800 square foot restaurant dinning room being moped with 2 cups of heavy duty 2X concentrate soap mixed with 2 gallons of water. Along with the overwhelming aroma of lemon dis-infective would be the overwhelming long term costs applied to the dry goods inventory. The manufacturer’s recommended amounts, if followed, are more than enough.
Now, applying this same observation to my personel habits have opened my awareness of actually how much perfectly good home products I would essentially just pour down the drain and eventually into the water treatment facilities, streams, water table, etc… . Perhaps this simple and quit obvious use of laundry detergent is just catching up to me, but actually using the measuring cap for recommended load size at home has already saved money while providing the same fresh and so clean results.
There is a term I like to use, “land fill avoidance”, in describing aspects of what I do. Applied towards a broader definition the term has made me aware not just the stuff I put into the trash bin but also how much daily chemicals I use in my life.
Across the country this summer states are suffering from abnormal conditions due to lack of snow pack and minimal spring rains. One side-effect of this is fire risk, and it’s never been more visible than the current fires sweeping the west. One cause of fires in dry conditions like this is live ammunition rounds at shooting ranges. In 2012 alone there have been 20 fires in Utah from shooting ranges. All it takes is a single spark to ignite.
The challenge is to develop a solution to help mitigate this risk with recycled materials
The solution: 100% steel free recycled rubber chips that are reinforced with polyester and nylon. We gather excess rubber from manufacturers and chop it into 3” pieces to be used on shooting ranges as bullet stopping material. Utilizing an engineering principle known as in-elastic collision, this rubber not only stops projectiles without sparking it also traps their by-products from entering the air and ground. Also, the rubber itself is fire resistant. We have held a plumbers torch to it for minutes and it does not maintain a flame. Another factor in considering our rubber chip solution is costs. By not entering the dirt, companies can avoid expensive HAZMAT handling fees as well as recovering dollars by recycling the lead itself.
Overall, this is an excellent, “green” and cost-effective solution for shooting ranges to minimize the risk of fire in dry conditions and another great solution by the commodigy team.
It is time for the next chapter of commodigy and to continue the vision to the global green trading platform for green commodities and products. We are in the process of implementing changes over the next six months which will enable us to grow with our customers needs as well as expanding into a new direction for our trading platform. What you can expect over the next six months:
1. A new look
2. Even Easier
3. A full trading platform
4. Comprehensive reporting
5. Auction capabilities
6. Multiple analyst reviews
We appreciate all of the feedback that we receive and the ideas, keep letting us know your thoughts on the transformation as well as bear with us while we undertake this transformation to the new Commodigy.
Here we go again, all of those players that surface in the market when it is tough and trying to rely on the relationship. Where exactly were they a few months ago when the market was the other way and benefiting not using recycle plastics. I think we will keep this post simple and easy; look at the big picture and consider action in a tactical environment when considering a strategic relationship; Patience is a virtue and will show who the real partner are versus the opportunists.
These are the times when we see how partners really are and if in fact a partner or not. Will those customers still be there in these tough market conditions? Are they really partners or opportunists? We have had the advantage of being the “middle man” for many customers and suppliers and it really needs to be a partnership, especially in plastics and recycling.
There are those customers that are there when they are saving .20 – .40 / lb. on in a hot market, but as soon as the market turns, gone. They simply stop buying and come up with great excuses. Is this a partnership? I have always believed in partnerships being two way streets and not a matter of convenience. What if the supplier / small recycler were to stop selling to you in a hot market or hike their prices?
From the supplier’s side, I have seen several large recyclers get burnt in the past few years, which has been a result of several key points that could be addressed. First, the suppliers need to keep a better read on the market and not procrastinate communicating to the scrap suppliers. Secondly, buy pricing of scrap needs to be adjusted immediately per the market, even when the other “Scrappy” characters are there offer higher amounts to take your feed stream. Take care your business and communicate, if they are true partners they will stick with you or come back to you in a few months when they get burnt.
From the customer side (i.e. Manufacturer) trying to squeeze every penny out of your suppliers only goes so far before you lose that supplier. If you truly are partners you will work with your suppliers in all markets, not just when it is convenient for you and in your favor. Understand the market over time and look at the situation strategically, not just tactically. It is easy to penny pinch and try to save every penny in a down market, but look at the supply chain over a longer period of time and understand your supplier’s business and what they are dealing with if you want to keep them
Communicate, partners need to talk, understand, and work together in all markets; If you lose the supply stream altogether, who wins? Ensure you have a good program in place that is good for everyone in every market.
Here we go again. Commodity grade PP dropped .14 / lb. and planning on going down another .08 – .10 in November. We have seen this many times over the past five to seven years and what have we learned:
- Recycling materials lag prime and it usually takes 2- 3 months to catch up. Mitigate your risk with monthly price reviews and look at his as a true partnership through all markets, steady wins the race.
- We find out who the real business people are in this market and who the shady ones are that give scrap a bad reputation. If you are having processing done outside, keep an eye on your materials and ensure your feed streams are consistent and the same. We have seen many times where processors cut corners and substitute cheaper materials into the formulas, cut corners, steal, and increase “shrinkage” in the processing. Keep aware of your materials and volumes.
- It is a great time to secure feed streams. The market is flooding with good materials, which is good for green applications to secure an ongoing steady stream.
- Using densified material is a good idea to supplement the higher cost pellet, there is great material out there and if feeds well for injection molders. In general, keep your options open on recycled plastics and forms.
- Retailers will always be knocking when the market dips or free falls even though the materials were planned months ago. Ensure you have a good supply chain and communication plan in place.
- The formula is everything; if you do not have the right formula that is constant and works, it won’t matter what material you have and not everyone can recycle plastic well.
- We are seeing quite a bit of manufactures explore other plastics that are more stable than the PP market.
The best practice is to put a stable program in place that monitors all of this for you and keep you stable in all markets and ensures you constantly have an ongoing feed stream for your applications. Be aware of market conditions and ensure you have a good communication plan in place with suppliers and customers.
Seller beware. Where is your scrap and excess inventory going? Scrap is scrap, a commodity, but not your core business. It is also a revenue stream, so ensure you put a proper program in place that fits your business.
1. Price, since that is what most lead with. There are many variables in market conditions, so agree on a percentage cost and tie to an index that is fair for all. Do not be greedy and do not base your program solely on pricing, look at the big picture, but also understand you have a commodity. Expect fair pricing and reporting as well as have quarterly if not monthly reviews of pricing.
2. Partnership is two ways. Sure your scrap is a commodity and there are many people that want it, but what do they want it for? It is important to have a good partner that understands your business and has a full disclosure model to the entire supply stream. At the same time, you need to be committed to the program you implement, you may have to change a bit.
3. Customers. Know where your materials and customers materials are going. Ensure they will not be competing against you in another market. Conduct audits and understand where it is going as well as keep up on market conditions, at least quarterly or monthly even in this volatile economy. The most ideal situation is partnering with molders and retailers to create green sustainable products. This also ensures you know where your materials are going for the long term, set it and forget it. We have a new client that asked us to create a program without export because a customer viewed their packaging in a far away place being used on another product. They lost that cornerstone account because of it.
4. Customer service. The market is too competitive not to demand the best customer service. There are several key points that should be included in your program agreement with service being a priority, it is scrap, do not let it interfere with your core business.
5. Keep your finger on the pulse. Just that, regularly review and ensure your program is right for your current program. Get one of these sustainability graduates that are in the market with no jobs. They are educated and bring a fresh set of eyes.
6. Mitigate your risk. Always have back ups, especially in the economy we live in, alot of groups are here today and gone tomorrow and them back again under a new name. Do your homework.
7.Sustainability. Are we doing everything we can to avoid landfill and reduce our waste? If it can be used, ensure it is in the program. The goal is to catch up with Europe, there should be no waste period.
The good news is that there is much less scrap plastic out there, which means several things: First, companies are more environmentally conscience and more efficient with technology as well as recycling programs. Secondly, it means that there is much less post industrial scrap out there to fight over with the shady scrap dealers. Finally, what it means is that we need to adapt to meet our customers needs with new feed streams and innovation.
Commodigy looks at this as a great opportunity. We have a steady flow and supply stream of post industrial materials, but now we find ourselves at the forefront of a huge movement for post consumer materials. This is due not only to our customers needs and requirements from their customers (Retailers), but also the sheer amount of opportunity with lack of solid players in it with experience.
One major subset of the post consumer vertical is the area of healthcare. We are now recycling two major feed streams in medical that have for the most part in North America have been going to land fill. We are now taking material from a prominent healthcare institution here in Cleveland that was going to landfill and we turn it into a pellet where we then mold it into blue recycling containers, which will be used in the health network to collect recyclables. We have taken a previously land filled item and came full circle to a green product, now that is innovation and the program is growing rapidly. I did not even touch the economics, but lets just say the savings is great and the landfill avoidance is even better.
Commodigy worked not only with the healthcare provider and their environmental team on this program, but get this, The waste hauler / Landfill owner. Who would of thunk it?
We finally see PP on the rise in January, up .15 / lb. Amazing how everyone is calling now for recycled pellet in this market.
“It is what it is”
We had yet another experience today of the deal too good to be true. We were offered the same great materials as by many others called “PET Non Wovens” 250 tons. why would you not not jump on this, even though the buy is amazing?
Because it is not PET Non-woven. It is what it is and not what some people read it is and thinks it is based on distant info that they did not actually check out. Getting fed up with people mis representing items and making things what they re not to make a quick buck and be gone. This market has been overwhelmed by shady people that screw anyone they can and it is old. Where are they now?
Ensure you get what you want and consistently; do not accept less.
Confirm everything, which means photos, both up close and volume; details; and samples
Get an MSDS sheet or physically confirm.
It is a good time to buy and secure feed streams of reprocessed PP resins. We have several new feed streams available of PP Repro 35 – 40 melt pellet available for sale. Please reach us if you do not see the material on the site that you need.
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