Posted On: 10/05/2014 8:56:38 PM
Post# of 43066
Re: PaperProphet #14337
The simple math formula that you promote states that for an entity that has a processor, buys HDPE for $800 a ton (2,000 lbs), converts 75% of it to diesel, and sells the diesel on the spot market @ $2.70 a gallon, or $506 (based on the alleged ratio of 8 lbs of plastic to a gallon of product), operating such a processor is a losing proposition. The theorem is expressed in the following form:
When the cost of (or revenues derived from the sale of) HDPE is greater than the value of the end product, operation of a processor is a losing proposition.
If expressed mathematically:
$800 > $506 is a true statement
so in the example described above, the simple math formula holds.
On the site that you linked:
http://www.recycle.net
I found a site in East Palestine, Ohio, that is selling HDPE for $560 a ton ( .28/lb, x 2,000 lbs).
http://www.recycle.net/cgi-bin/exview.cgi?wscg=01-100230
(2,000 x .28) = $560
(2,000 / 8 ) x .75 x $2.70 = $506
In this instance:
$560> $506 is a true statement
and the simple math formula holds true.
(2000 x .28) = $560
(2,000 / 8 ) x .75 x $ 3.73 (retail price of diesel in Ohio 10/01/14) = $699.37. That looks like a rough return of almost 25%.
In this instance:
$560 > $699.37 is not a true statement,
So the simple math formula does not hold true for any producer/ consumer of HDPE waste in Ohio who sells/buys it for less than $699.37, or .35/lb, and keeps the output to offset its own fuel needs.
Here is a site that I found selling waste HDPE:
http://materialmix.com/listing/browse/categor...2C+HDPE%29
This seller/buyer of unwashed ag film for $390 a metric ton (2,200 lbs) would instead process that metric ton which would yield about 206 gallons of diesel, or about $556 based on a spot price of $2.70 a gallon for diesel. That looks like a rough return of 42%.
http://materialmix.com/listing/detail?listing_id=4164
In this instance:
$390 > $556 is not a true statement
So the simple math formula does not hold true for any producer/consumer of waste plastic in Mexico that sells/buys its waste for less than $556 a metric ton and sells the output at the current spot market price of $2.70 a gallon.
The seller/buyer of ag film for $390 a metric ton would process that metric ton which would yield about 206 gallons of diesel, worth about $787 based on a retail price of $1.01 a liter, or $3.82 a gallon, in Mexico. That looks like a rough return of just under 202%.
In this instance:
$390 > $787 is not a true statement
So the simple math does not hold true for any producer/buyer of waste plastic in Mexico that sells/buys its waste for less than $787 a metric ton and keeps the output to offset its own fuel costs.
There is a seller of HDPE scrap in the UK that is asking $390 a metric ton. If that seller/buyer processed that metric ton instead, it would yield about 206 gallons of diesel, worth about $1,684, based on a retail price of $2.16 a liter, or $8.18 a gallon for diesel in the U.K. That looks like a rough return of just under 432%.
http://materialmix.com/listing/detail?listing_id=3997
In this instance:
$390 > $1,684 is not a true statement
So the simple math does not hold true for any producer/consumer of waste plastic in the U.K. that sells/buys its waste for less than $1,684 a metric ton and keeps the output to offset its own fuel costs.
There seem to be lots of different offerings at lots of different prices, and I could go on with example after example; but the takeaway here is that there are plenty of situations where a producer of waste HDPE / LDPE / PP plastic would be able to profitably operate a processor instead of selling their waste stream on the open market - in some instances, quite profitably.
When the cost of (or revenues derived from the sale of) HDPE is greater than the value of the end product, operation of a processor is a losing proposition.
If expressed mathematically:
$800 > $506 is a true statement
so in the example described above, the simple math formula holds.
On the site that you linked:
http://www.recycle.net
I found a site in East Palestine, Ohio, that is selling HDPE for $560 a ton ( .28/lb, x 2,000 lbs).
http://www.recycle.net/cgi-bin/exview.cgi?wscg=01-100230
Quote:
What does the simple math formula offer up for a producer/buyer of waste plastic in Ohio that processes a ton of HDPE waste and sells the output on the spot market for diesel?
(2,000 x .28) = $560
(2,000 / 8 ) x .75 x $2.70 = $506
In this instance:
$560> $506 is a true statement
and the simple math formula holds true.
Quote:
What does the simple math formula offer up for the same producer/ buyer who keeps the output to offset their own fuel needs?
(2000 x .28) = $560
(2,000 / 8 ) x .75 x $ 3.73 (retail price of diesel in Ohio 10/01/14) = $699.37. That looks like a rough return of almost 25%.
In this instance:
$560 > $699.37 is not a true statement,
So the simple math formula does not hold true for any producer/ consumer of HDPE waste in Ohio who sells/buys it for less than $699.37, or .35/lb, and keeps the output to offset its own fuel needs.
Here is a site that I found selling waste HDPE:
http://materialmix.com/listing/browse/categor...2C+HDPE%29
Quote:
What does the simple math formula offer up for a producer/consumer of waste plastic in Mexico that processes a ton of HDPE waste and sells it on the spot market.?
This seller/buyer of unwashed ag film for $390 a metric ton (2,200 lbs) would instead process that metric ton which would yield about 206 gallons of diesel, or about $556 based on a spot price of $2.70 a gallon for diesel. That looks like a rough return of 42%.
http://materialmix.com/listing/detail?listing_id=4164
In this instance:
$390 > $556 is not a true statement
So the simple math formula does not hold true for any producer/consumer of waste plastic in Mexico that sells/buys its waste for less than $556 a metric ton and sells the output at the current spot market price of $2.70 a gallon.
Quote:
What does the simple math formula offer up for a producer/consumer of waste plastic in Mexico who keeps the output to offset its own fuel needs instead of selling it on the spot market?
The seller/buyer of ag film for $390 a metric ton would process that metric ton which would yield about 206 gallons of diesel, worth about $787 based on a retail price of $1.01 a liter, or $3.82 a gallon, in Mexico. That looks like a rough return of just under 202%.
In this instance:
$390 > $787 is not a true statement
So the simple math does not hold true for any producer/buyer of waste plastic in Mexico that sells/buys its waste for less than $787 a metric ton and keeps the output to offset its own fuel costs.
Quote:
What does the simple math formula offer up for a producer/consumer of waste HDPE plastic located in the U.K. who keeps the output to offset its own fuel needs instead of selling it on the spot market?
There is a seller of HDPE scrap in the UK that is asking $390 a metric ton. If that seller/buyer processed that metric ton instead, it would yield about 206 gallons of diesel, worth about $1,684, based on a retail price of $2.16 a liter, or $8.18 a gallon for diesel in the U.K. That looks like a rough return of just under 432%.
http://materialmix.com/listing/detail?listing_id=3997
In this instance:
$390 > $1,684 is not a true statement
So the simple math does not hold true for any producer/consumer of waste plastic in the U.K. that sells/buys its waste for less than $1,684 a metric ton and keeps the output to offset its own fuel costs.
There seem to be lots of different offerings at lots of different prices, and I could go on with example after example; but the takeaway here is that there are plenty of situations where a producer of waste HDPE / LDPE / PP plastic would be able to profitably operate a processor instead of selling their waste stream on the open market - in some instances, quite profitably.
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