From the CEO
Good morning folks,
The plastics market is entering 2026 in a familiar position: cautiously optimistic, but bracing for turbulence. Shell's projected Q4 loss and the ongoing struggles at Monaca underscore what we've been watching—virgin resin overcapacity continues to pressure margins across the value chain, even as recycled bale prices for HDPE and PP show signs of firming.
The real story this year will be regulatory. California's initial recycling rate data is sobering: PET at 16%, HDPE at 19%—a long way from SB 54's 65% mandate by 2032. With CalRecycle withdrawing proposed regs and states from New York to Washington rolling out new packaging rules, compliance complexity is accelerating faster than infrastructure. For manufacturers and brand owners, the message is clear: procurement strategies need to account for shifting material availability and tightening sustainability requirements now, not in 2030.
Meanwhile, SABIC's European divestments and the continued M&A activity in medical plastics signal where capital sees opportunity—specialty applications and vertically integrated supply chains that can weather commodity volatility.
For those navigating this landscape—whether you're a recycler optimizing bale sales, a manufacturer securing feedstock, or a trader managing price risk—visibility and market access matter more than ever.
On that note: Matium is expanding and leveraging AI to connect markets faster. We're building on our plastics market foundation to support additional industrial materials as we work to strengthen and optimize the American industrial base. Check out our new website for a sneak peek. More to come soon.
Wishing you a strong start to 2026.
Thank you,
Bailey Robin - Cofounder/CEO
Key Indicators
| Indicator | Current | MoM | QoQ | YoY |
|---|---|---|---|---|
| Federal Funds Rate, % (FEDFUNDS) | 3.72 | -0.16 | -0.40 | -0.93 |
| PPI - Plastics and Resin (PCU325211325211) | 307.3 | -2.2 | -5.5 | -3.1 |
| PPI - Ocean Freight Rate (PCU483111483111) | 396.2 | -40.7 | 22.8 | -3.8 |
| PPI - Trucking Rate (PCU484484) | 192.8 | 0.9 | 1.3 | 4.3 |
| PMI - Manufacturing (ISM) | 47.9 | -0.3 | -0.3 | 0.7 |
| US Plastics Imports, $B | 5.52 | -0.06 | -0.39 | -0.22 |
| US Plastics Exports, $B | 6.58 | 0.29 | 0.15 | -0.09 |
| US Plastics Production Index (IPG326S) | 92.7 | -0.2 | -0.8 | -2.3 |
Sources: FRED, ISM, US Census.
Markets & Trade
1. Modest Growth on Horizon for US Plastics Industry
Source: Plastic Today
The US plastics industry faced significant cyclical volatility in 2025, with production dropping due to tariff uncertainties before a modest rebound at year's end, and manufacturers adapting to shifting demand and supply constraints.
Despite macroeconomic growth bolstering shipments, declining production meant inventory drawdowns filled the gap, while employment peaked in March but fell alongside contraction in production through October.
Trade activity sent mixed signals: export volumes for molds fell sharply despite higher prices, machinery imports grew overall but key segments declined, and the US maintained a resin trade surplus amid elevated tariffs and falling domestic prices.
Industry outlook for 2026 remains cautiously optimistic, hinging on lower interest rates, lingering tariff impacts, and overall alignment with US economic trends, with capacity utilization levels suggesting only gradual recovery.
2. Shell Signals Loss in Chemicals Division for Q4 2025
Source: Plastic Today
Shell expects its chemicals and products division to post a significant loss for Q4 2025, with adjusted earnings anticipated to fall below breakeven—down sharply from a $550M profit in Q3—due to persistent oversupply and weak market demand.
The company's indicative chemicals margin is projected to decrease to $140 per metric ton, compared to $160 previously, amid lower trading and optimization performance in the division.
Shell's flagship Monaca, Pennsylvania petrochemical plant faces mounting financial challenges, with costs doubling initial estimates and ongoing struggles with low demand, oversupply, and weak operating rates, casting doubt on its long-term viability.
3. HDPE, PP Bales Firm as Paper Stays Level
Source: Resource Recycling
Post-consumer natural HDPE prices surged over 11% month-over-month to 52.13 cents/lb, while color HDPE and PP bales also saw price increases, reflecting renewed demand or constrained supply for these materials.
PET bottle prices remained steady at 5.38 cents/lb after previous declines, indicating stabilization but at a considerably lower level compared to last year.
In contrast, prices for A- and B-grade film dipped, with C-grade film falling into negative territory, highlighting persistent downward pressure on lower-quality film grades.
Compared to last year, most plastics bale grades continue to trade significantly lower, signaling ongoing challenges and pricing volatility in the recycled plastics market.
Business & Corporate Strategy
1. SABIC Sells European, Americas Assets to German Firms
Source: Recycling Today
SABIC has agreed to sell its European petrochemical assets producing olefins and polyolefins to Germany-based Aequita SE & Co. KGaA for $500 million, involving four production sites and $3.5 billion in revenues.
SABIC is also selling its engineering thermoplastics (ETP) business in Europe and the Americas to Mutares SE & Co. KGaA for $450 million, including eight production facilities with a $2.5 billion revenue base, serving multiple industries such as automotive and construction.
These divestments align with SABIC's ongoing portfolio optimization strategy to focus on high-margin markets and improve cash flow, while Aequita and Mutares aim to consolidate and expand their positions in the European olefins/polyolefins and specialty chemicals markets.
2. Currier Plastics Finalizes Acquisitions of Medtech-focused Contract Manufacturers
Source: Plastic Today
Currier Plastics has acquired California-based medical contract manufacturers Springboard Manufacturing and MOS Plastics, expanding its operational footprint and service offerings.
Both acquisitions significantly increase Currier's cleanroom manufacturing capacity and establish a strong West Coast presence, positioning the company to better serve pharmaceutical, medical device, and diagnostics customers.
The deals, backed by Sheridan Capital Partners, align with Currier's strategic growth plan following its own acquisition and reflect ongoing market consolidation in the medical plastics manufacturing sector.
3. Medtech CDMO Arterex Adds Irish Molder to Extensive Portfolio
Source: Plastic Today
Arterex, a global CDMO specializing in plastic-based medical technology manufacturing, has acquired Irish firm Synecco, expanding its European footprint and capabilities in advanced medical delivery systems.
The acquisition strengthens Arterex's offerings in injection molding, cleanroom production, and end-to-end product development for medical devices, leveraging Synecco's two decades of experience in the field.
This move is part of Arterex's broader strategy to build a comprehensive medtech manufacturing portfolio through recent acquisitions spanning three continents, further integrating design, engineering, and supply chain solutions.
Governance & Oversight
1. California Posts Initial Recycling Rates
Source: Resource Recycling
California released its initial recycling rate estimates for packaging materials covered under its extended producer responsibility (EPR) law, SB 54, revealing that most plastics—including PET and HDPE containers—fall far short of mandated targets.
Plastic recycling rates in 2024 remain low, with clear PET bottles at 16% and natural and colored HDPE bottles at 19%, compared to significantly higher rates for materials like glass (65%) and paper (71%).
SB 54 requires plastic packaging and single-use flatware to reach a 65% recycling rate by 2032, but its implementation has been delayed due to concerns from state leadership and industry stakeholders.
2. CalRecycle Withdraws Proposed Regs for SB 54
Source: Resource Recycling
CalRecycle has withdrawn proposed regulations for implementing California's SB 54 EPR law, citing the need for greater clarity and alignment with the statute, particularly regarding food and agricultural packaging.
The withdrawal comes amid ongoing delays and stakeholder feedback, with concerns that previous drafts could have created broad exemptions for certain packaging, undermining the core aims of the legislation.
Despite the regulatory pause, statutory deadlines remain in effect and CalRecycle will reopen the public comment period, extending industry uncertainty about compliance requirements.
The implementation timeline remains broadly on track, with the producer responsibility organization aiming to submit its final plan by June 2026 and regulatory approval anticipated by January 2027.
3. New Year, New Rules: States Tackle Packaging
Source: Plastic Today
Several US states—including California, New York, Illinois, Maine, Virginia, and Washington—are introducing or strengthening regulations in 2026 to reduce single-use plastics, restrict PFAS chemicals, and tackle plastic packaging waste.
California has implemented a statewide ban on all plastic bags at store checkouts, closed loopholes for thicker 'reusable' bags, and is tightening labeling rules for recyclability symbols, impacting manufacturers' packaging decisions.
Illinois, Maine, and New York are expanding bans on small single-use personal care bottles in hotels and on the use of PFAS and polystyrene foam in food packaging, compelling businesses to shift toward refillable or recyclable alternatives to comply.
Washington and Virginia are adjusting bag fees, thickness standards, and EPS container bans, with phased implementation, new compliance requirements, and increasing penalties for violations, signaling heightened regulatory oversight across the industry.
Innovation & Product Development
1. 'Lego' Strategy Transforms Waste PE into High-Performance Materials
Source: Plastic Today
Researchers from Sichuan University have developed a modular 'Lego' strategy that transforms waste polyethylene (PE) into high-performance, multifunctional materials with properties such as flame retardancy, UV shielding, antistatic behavior, and dyeability.
The two-step process first oxidizes and degrades waste PE, then assembles it with various functional monomers using dynamic imine bonds, resulting in materials with tensile strength nearly four times greater than original PE, as well as enhanced solvent resistance.
This approach enables full physical and chemical recyclability, allowing the upcycled materials to be reprocessed multiple times or completely degraded for circular reuse, representing a significant advance for high-value recycling and the circular economy in plastics.
2. CAI Launches High-Efficiency Halogen-Free Flame Retardant
Source: Plastic Today
CAI Performance Additives has launched ST-MCA-H, a halogen-free flame retardant that achieves UL-94 V-0 ratings in unfilled PA6 and PA66 at significantly lower loadings than conventional melamine cyanurate, improving cost-effectiveness and processing efficiency.
The additive's lower dosage preserves key mechanical properties and surface quality in nylon compounds, while also reducing risks of blooming, migration, and density—factors critical to producing high-performance parts.
ST-MCA-H's environmentally friendly, metal-free formulation addresses industry and regulatory demand for sustainable flame retardancy solutions, particularly for electrical and electronic components that require stringent safety standards.
Sustainability & Resource Management
1. US Plastics Pact Releases Progress Report
Source: Resource Recycling
The US Plastics Pact released its first Impact Report for the second phase of its initiative, highlighting both progress and persistent challenges in advancing a circular plastics economy.
While over half of the plastic packaging from Pact signatories is now reusable, recyclable, or compostable—up from 36% in 2021—recycling rates are still hampered by infrastructure limitations, inconsistent data, and weak end-market demand.
The report outlines plans for 2026, including updated design guidance, a new source reduction workstream, and policy recommendations to accelerate packaging elimination, redesign, and compostable packaging infrastructure.