Material Market Update - May 4, 2026

From the CEO

Good morning folks,

April was a busy month!

At Matium, we announced our $8M Seed round along with a trade finance partnership with Erebor Bank, enabling Matium to provide flexible payment terms to qualified buyers and sellers as we advance our mission of digitizing the plastics market. We saw our biggest month of transactions yet, had a surge of railcar auction volume, and welcomed a couple industry veterans to the team.

In the industry, we have been tracking volatility across the board. With the Strait of Hormuz still metered, international petrochemical supply shocks have propped up pricing and US producers have taken advantage. Margins are the highest they have been in years as domestic producers lean on domestic feedstocks while the rest of the world struggles to supply their plants.

The market movement is supply driven. I have yet to talk to an owner in the market who says that end market demand is booming. Spot markets popped with the panic, but are softening with weak demand:

The jump in pricing without strong demand allowed the market to flee to less-informed secondary markets (regrind, repro, excess inventory). At the beginning of April, spot spreads were 20-40%. Secondary markets went short by end of April and pricing started to catch up toward resin. PE/PP regrinds now in the 30-45 cpp range, PET regrinds up in the 60's. PP/PE bale markets recovered slightly while PET bale markets are still depressed due to domestic bale-to-flake capacity being wiped out during the 2023-2025 recycling recession.

Looking ahead, the market has baked in healthy margins that will take a while to erode. Once suppliers normalize these margins, they will fight to keep them. If demand stays soft, competition will be able to pressure margins down faster than if demand picks up. Demand may receive stimulus with the new Fed chair coming in this quarter, but the fundamentals make a rate drop questionable. Broadly speaking, the real economy needs a boost as it takes a backseat to AI. We are on a path for either reckoning or inflation.

Expect buyers to keep inventories light with hopes of pricing relief in Q3. It is likely that we see a softening throughout Q2 and then have a dead-cat bounce in Q3 as all buyers try to replenish inventories at the same time. Leading into hurricane season, buyers will have to question their risk tolerance. We will need to watch interest rates, deregulation, and supply shocks (hurricanes, geopolitics, closures). These levers on top of a market that still operates behind closed doors on emails and phone calls make the forecast hard to pin down.

Plenty of activity ahead in the plastics market. We are eager to help more companies throughout the industry prepare for the era of AI and increase their access to and abilities in the market. May the 4th be with you...

Thank you,
Bailey Robin - Cofounder/CEO

Key Indicators

Sources: FRED, ISM, US Census.

Markets & Trade

1. Dow Sees No End to PE Price Hikes in the Short Term

Source: Plastic Today

• Dow reports that approximately half of global ethylene and polyethylene supply is currently offline or constrained due to the Iran war and the closure of the Strait of Hormuz, causing significant upheaval in the plastics resin market.
• Polyethylene prices have surged in early 2026, with incremental increases proposed through May, as disruptions drive up raw material costs and restrict resin availability across Asia and Europe.
• Analysts question the sustainability of robust price gains for North American producers like Dow if supply conditions improve, but Dow projects the current shock will persist throughout 2026 and reshape global chemical markets.
• Dow's modeling suggests that normalization of supply chains could take at least 275 days, with ongoing geopolitical instability likely extending this timeline and intensifying pricing pressures worldwide.

2. Recycled Resin Markets: Rising Price of Virgin Resin Improves Competitiveness

Source: Plastic Today

• The closure of the Strait of Hormuz has driven up prices for virgin polyethylene (PE), polypropylene (PP), and polyethylene terephthalate (PET), reducing their traditional cost advantage over recycled resins and opening new competitive opportunities for recyclates based on economics as well as sustainability.
• Despite improved relative pricing, substitution to recycled PET (rPET) remains limited due to cautious buying behaviors and oversupply, with U.S. recycler closures exacerbating supply issues and increasing export demand for PET bales.
• Recycled PE and PP markets are experiencing tightened supply and rising prices, partly due to brand owner demand, restocking linked to geopolitical tensions, and higher virgin resin prices, with rPE showing particular sensitivity to pre-buying in response to the U.S.-Iran conflict.
• Market volatility and regional disparities in recycling infrastructure are affecting recycling rates and accessibility, with higher-income, better-educated communities recycling more due to proximity to industrial facilities, highlighting ongoing challenges for equitable plastics recycling in the U.S.

3. US-Japan Plastics Trade Faces Challenges Amid Tariff Shifts

Source: Plastic Today

• Recent changes in US trade and tariff policies have led to a downturn in US plastics trade, with both imports and exports falling in 2025 and import duties surging by over 100%, reflecting a tougher trade environment for plastics manufacturers.
• The US-Japan plastics trade deficit narrowed significantly due to these trends, but underlying causes include reduced trade activity and higher costs rather than improved competitiveness, with broader structural and macroeconomic factors at play.
• Both countries face growing pressures from a shift away from multilateral trade agreements toward bilateral deals and higher tariffs, increasing uncertainty and disrupting established global supply chains within the plastics sector.
• A US Supreme Court ruling limiting presidential authority to impose tariffs and ongoing policy shifts are contributing to instability, making adherence to consistent, rules-based trade agreements critical for business planning and global industry resilience.

Business & Corporate Strategy

1. WM Cites Recycling as a Factor in Earnings Growth

Source: Recycling Today

• WM reported a 13.5% year-over-year increase in first-quarter net income, highlighting growth driven by disciplined pricing, cost optimization, and strategic investments in recycling and renewable energy.
• Recycling and Renewable Energy business units saw a $51 million EBITDA increase, attributed to higher recycling volumes, enhanced automation projects, and greater renewable natural gas (RNG) production, despite declining prices for single-stream recycled commodities.
• Recent operational milestones include opening new recycling facilities in Ontario and Detroit and expanding processing capacity by nearly 300,000 tons through automation and facility investments.
• WM's outlook remains optimistic for the rest of 2026, expecting continued revenue growth in its solid waste, healthcare, and sustainability businesses, projecting full-year revenue of $26.4-26.6 billion, up around 20% from 2025.

2. E-plastics Recovery Line Opens in Canada

Source: Resource Recycling

• Quantum Lifecycle Partners unveiled a $4 million advanced e-plastics recovery line in Toronto, enabling large-scale recycling of complex mixed plastics from electronic waste using float-sink technology.
• The new system removes hazardous brominated flame retardants in compliance with Basel Convention standards, producing contaminant-free e-plastic flakes comparable to virgin feedstock and expanding options for downstream processors.
• Quantum sources feedstock nationwide and is increasing capacity by partnering with other e-recyclers, positioning itself as a regional hub for e-plastics processing with potential to serve North American markets.
• The investment supports Ontario's extended producer responsibility framework and demonstrates Quantum's strategy to advance circular solutions in electronics, addressing historically low plastics recycling rates in the segment.

3. Sonoco's Consumer Packaging Segment Outperforms Expectations Despite Headwinds

Source: Plastic Today

• Sonoco reported Q1 2026 net sales of $1.7 billion, with the Consumer Packaging segment outperforming expectations due to price adjustments, despite headwinds from inflation, tariffs, and reduced volumes.
• Severe winter weather, a fire at a recycling facility, and geopolitical uncertainty disrupted operations, impacting the Industrial Paper Packaging segment, which experienced lower profits and margins amid softer demand.
• The company achieved $8 million in recurring cost savings in the quarter through its Profitability Performance Plan, aiming for $150–200 million in savings over three years to offset higher input costs from inflation and maintain resilience.
• Sonoco remains focused on sustainable growth, disciplined capital allocation, and continued dividend increases, while taking actions to pass on rising costs in energy, logistics, chemicals, and resins to customers.

Governance & Oversight

1. Florida AG Subpoenas Plastics Industry Groups, Brands Amid Antitrust Investigation

Source: Recycling Today

• Florida's Attorney General has issued civil investigative demands to major plastics industry groups, brands, and affiliated environmental organizations as part of an antitrust probe into suspected collusive partnerships.
• The investigation focuses on whether collective actions—such as setting uniform packaging targets and designating certain materials as 'problematic'—have restricted trade, increased consumer prices, and reduced market competition.
• Subpoenaed parties are required to provide comprehensive documentation about their internal and external communications, decision-making frameworks, and economic impacts related to standardizing packaging and recycling initiatives by late May.
• This state-level action underscores growing legal scrutiny of industry-backed sustainability alliances, raising risks of antitrust exposure for companies and groups collaborating on plastic packaging policies.

2. Breaking Down the Challenge to California's 'Truth in Recycling' Law

Source: Recycling Today

• A coalition of 18 food and packaging industry groups has filed a lawsuit challenging California's Senate Bill 343, arguing the new 'Truth in Recycling' law infringes on First and Fourteenth Amendment rights by restricting the use of recyclability symbols and claims unless strict state thresholds are met.
• The law, set to take effect in October, requires companies to substantiate recyclability claims with California-specific data, placing the burden on businesses to interpret complex criteria and maintain detailed compliance records, or otherwise remove recyclability labels from products and packaging.
• Plaintiffs contend the law's vague requirements and reliance on evolving data sources create substantial compliance risks, increase operational costs, and expose companies to both regulatory penalties and consumer class actions for mislabeling.
• This litigation underscores a national trend toward stricter regulation of environmental marketing claims, with the outcome potentially influencing how other states approach recyclability labeling and setting precedent for constitutional limits on commercial speech in the plastics and packaging industries.

3. IBWA Pushes for Recycling Legislation to Move Forward

Source: Recycling Today

• The International Bottled Water Association (IBWA) is urging lawmakers to advance several key recycling bills, including the STEWARD Act and CIRCLE Act, aiming to expand and modernize U.S. recycling infrastructure.
• Key provisions of the proposed legislation include targeted EPA grants to underserved communities, improved national recycling data, and federal tax credits to support the use of recycled content in packaging.
• IBWA emphasizes that bottled water packaging is designed for recyclability, with increasing use of recycled PET (rPET), and highlights bottled water containers as leading contributors to PET recycling rates in the U.S.
• Industry advocates argue that bipartisan policy action can drive measurable progress toward a circular economy by incentivizing recycled content use and improving access to recycling programs nationwide.

Innovation & Product Development

1. Church & Dwight Earns ReMA's Design for Recycling Award

Source: Recycling Today

• Church & Dwight earned ReMA's Design for Recycling Award for redesigning the Toppik Hair Building Fibers container, significantly improving recyclability and reducing plastic usage by 50%.
• The updated packaging incorporates 30% postconsumer recycled content, eliminates problematic materials, and introduces a perforated shrink sleeve to facilitate label removal, enhancing material recovery in existing recycling systems.
• These changes are expected to enable the recovery of about 128,000 pounds of previously unrecyclable plastic, positioning the innovation as a strong example of practical steps toward greater packaging circularity.
• ReMA highlights that as demand for recycled materials grows, such packaging innovations are crucial for reducing waste, strengthening domestic supply chains, and improving recycling efficiency in the plastics industry.

2. Hawaii Trials Asphalt Made with Plastic Debris and Nets

Source: Resource Recycling

• Researchers in Hawaii are trialing the use of recycled plastic debris, including polyethylene from fishing nets and household waste, to reinforce asphalt in road construction, aiming to address both landfill pressure and marine debris.
• Initial findings from road sections on Oahu show that pavement containing recycled plastic does not release more microplastics than conventional polymer-modified asphalt, with tire wear found to be a much greater source of microplastics in road dust.
• The project, supported by the Hawaii Department of Transportation, leverages local collection and reuse of derelict plastic waste, reducing the environmental and economic costs associated with export, incineration, or landfill disposal.
• Further research will continue to monitor long-term pavement durability and environmental impact, with early results indicating recycled plastic-modified roads are holding up well after four years of use.

3. Study Highlights Role of Heat-Tolerant Enzymes in Sustainable PET Recycling

Source: Plastic Today

• Researchers at Tokyo University of Science have uncovered how heat-tolerant enzymes, specifically a cutinase from Chaetomium thermophilum, maintain both stability and flexibility at temperatures optimal for PET plastic recycling.
• Their study reveals that a rigid core ensures high-temperature stability while a flexible lid loop near the active site allows for effective molecular recognition and catalysis, overcoming a key technical barrier in enzymatic PET recycling.
• By establishing molecular design principles for heat-resistant enzymes, the findings provide a foundation for engineering biocatalysts capable of efficient, industrial-scale PET recycling—addressing a major obstacle to plastics circularity.
• Parallel research at Los Alamos National Laboratory underscores rapid progress in enzyme engineering, leveraging computational and high-throughput techniques to further boost performance and scalability in PET biorecycling.

4. Flexible Packaging Recycled into Food-Grade Resin

Source: Plastic Today

• Nextek and Coveris have launched a demonstration plant in the UK that uses COtooCLEAN technology to convert mixed post-consumer polyethylene (PE) and polypropylene (PP) films into high-quality, food-grade recycled resins.
• COtooCLEAN employs supercritical CO₂ extraction to deeply remove contaminants—like oils and odors—from polyolefin film waste, overcoming a major barrier to food-grade recycling that mechanical processes struggle to address.
• This facility represents a key step in advancing flexible packaging circularity by enabling the production of recycled materials suitable for more demanding, food-contact applications.
• The project will undergo industrial-scale trials to generate data for European regulators and aims to validate the technology for broader industry adoption, potentially improving both recycling rates and resin quality.

5. Delrin Debuts World's First Carbon-neutral Acetal

Source: Plastic Today

• Delrin unveiled the world's first carbon-neutral acetal, Delrin ZA, at Chinaplas 2026, achieving a zero Product Carbon Footprint (PCF) through ultra-low carbon methanol, certified renewable electricity, and sustainable steam.
• The introduction of Delrin ZA expands Delrin's Sustainable Solutions portfolio, which now includes four acetal variants offering varying degrees of carbon footprint reduction to meet diverse sustainability needs.
• The new portfolio positions Delrin as a market leader in sustainable engineering plastics, allowing customers to select carbon-reduced materials without sacrificing material performance or requiring product requalification.

Sustainability & Resource Management

1. Apple Releases 2026 Environmental Progress Report

Source: Recycling Today

• Apple has reached a milestone of 30% recycled material used across all products shipped in 2025, with major advances in eliminating plastic from packaging in favor of recyclable fiber-based alternatives.
• The company employs 100% recycled cobalt in batteries, 100% recycled rare earth elements in magnets, and 100% recycled gold and tin in printed circuit boards, demonstrating significant progress in material circularity for electronics manufacturing.
• Apple is scaling up innovative recycling technologies, such as the newly launched Cora electronics recycling line and the machine-learning-powered A.R.I.S. detection system, to improve material recovery rates and sorting efficiency.
• Apple's supply chain waste diversion programs have redirected over 600,000 metric tons of waste from landfills and achieved zero-waste-to-landfill operations at final assembly sites, setting new industry benchmarks for environmental stewardship in electronics.