Film recycling – Major Setback for Film Recycling as WM Closure Exposes Deep Structural Flaws in Plastic Waste Economics 05-11-2025
Film recycling – Introduction
Two weeks after the closure of the film-recycling operations at WM, stakeholders across North America are assessing what the decision means for the broader industry. Drawing on nearly two decades of experience, one veteran in the recycling sector said he does not recall a tougher period than the last two years. This article explores the factors behind that view and the implications for film recycling moving forward.
Cost Pressure and Feedstock Pricing
Feedstock film bales — especially A-grade bales composed of 95-99% clear material, such as pallet wrap — remain stubbornly stable in price despite mounting production cost pressures from labour, energy and logistics. The economics simply aren’t working, the industry veteran explained. The spread between recycled resin sales price and raw material cost is now too narrow to cover production expenses.
At the same time, ample domestic virgin resin supply (especially virgin PE) continues to suppress demand for recycled resin. One executive put it simply: when virgin resin is cheap, why would a brand buy recycled? These forces combine to squeeze profit margins and reduce incentives for film recycling operations to stay viable.
Stability in Bale Pricing, But Selectivity Rising
Although prices for A-grade film bales have held in the range of about 18-19 cents per pound since June 2024, this belies growing strains within the market. Domestic capacity had been expanding, and with the exit of a major buyer in the sector, more bales are now available to the market. Yet price has not dropped accordingly — instead buyers are becoming much more selective about the quality of bales they will accept, and lead times are increasing.
Export demand remains a lifeline for some, particularly into South and Southeast Asia. But even there, rather than blasting ahead, the film bale market is bracing for possible deterioration.
Structural Weaknesses: Supply Chain and Business Model Risks
The business model for film recycling remains highly cost sensitive. For example, technology and policy research demonstrate that flexible film applications (typically HDPE/LDPE/LLDPE films) face collection, sorting and contamination issues that hinder economics. In Europe only around 20% of PE flexible films placed on the market were recycled into film-suitable output in one recent study. Quality issues — contaminants, colourants, multilayer structures — make high-value reuse difficult.
In North America, industry interviews highlight insufficient volumes of high-quality polyethylene film waste, along with contamination and inconsistent feedstock, as key limitations to recycling infrastructure viability. These structural challenges mean that even well-intended recycling operations struggle to scale or achieve profitable output.
Moreover, voluntary recycling targets and non-mandatory programmes are proving inadequate to stabilise supply or demand for recycled content. Without firm contracts, agreed purchase volumes and secure end-markets, recyclers remain exposed.
Virgin Resin Advantage Erodes Recycled Resin Demand
While pressure mounts on recyclers, virgin resin capacity — especially for polyethylene — continues to grow. Cheap virgin PE remains the chief roadblock for recyclers, particularly those processing film (LDPE/LLDPE). With low virgin resin pricing, recycled resin struggles to compete unless brands commit to higher cost structures or regulatory incentives force recycled content uptake.
Industry veterans expect that the “trough conditions” for virgin PE may persist for a year or more, meaning the cost gap between virgin and recycled resins will remain a drag. Until that gap narrows, film recycling economics will remain under intense pressure.
What Comes Next?
The closure by WM raises a stark question: will others follow? The verdict among many in the sector is yes — especially smaller film-recycling players that cannot absorb continued margin pressure or fund infrastructure upgrades. The value chain needs secure supply contracts, consistent feedstock quality, and reliable demand for recycled content to stabilise.
Regulation may help, but only if durable business models exist alongside it. Extended Producer Responsibility (EPR) frameworks and mandatory recycled content quotas could bolster demand, but without supporting economics for recyclers the cycle falters. In the words of a sector veteran: the industry doesn’t work on supply and demand alone — it needs policy, contracts and financial viability.
In the near term, the film-recycling sector remains in crisis. But beyond the crisis window lies opportunity: if the whole value chain — from retailers and brands to recyclers and policymakers — aligns on quality, supply, economics and circular-design, then film recycling can achieve a healthier footing.
Conclusion
The recent closure of a major film recycling operation spotlights the deep structural challenges in the film recycling market: slim margins, cheap virgin resin, quality and supply issues, and inconsistent policy support. Unless all parts of the chain adjust — feedstock sourcing, purchasing commitments, economics, and regulation — the sector is likely to encounter further turbulence. The time for action is now.
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