The US plastic recycling industry is struggling to regain its footing as the coronavirus upends its business model, potentially putting many recyclers at risk of going out of business.

When the pandemic led to widespread shutdowns in late March and April, millions of employees left office buildings to work from home, cutting off a large supply of polyethylene terephthalate (PET) plastic bottles from businesses.

Residential foreign sales of large consumer beverage brands have fallen sharply since the lockdown began. The lack of sporting events, concerts and other crowd-packed gatherings, as well as the closure or restricted operation of bars and restaurants, has seen bottled beverage purchases plunge across the United States. In addition, workplace sales also remain sluggish as many office buildings have yet to be restored.

Coca-Cola, for example, reported in early April that out-of-home sales were down 25 percent year-over-year, which led to a big drop in demand for portable packaging. As some economies slowly reopened, those sales recovered 10 percent by June, but still pushed the company's total second-quarter loss to 16 percent.

Despite the recent slowdown in sales losses, James Quincey, the chief executive, said uncertainty about the outbreak remained high as infections picked up in various regions, which could lead to another round of shutdowns.

commercial recycled fell, the community where rising

don't follow typical recycling market supply and demand trends. Consumers control the supply of curbside PET available for disposal, and commodity value has no effect on behavior. And because municipalities or local governments control how supplies are collected and enter the value chain, the entire recycling system relies on community projects, which are often funded only by taxpayers.

This makes curbside recycling programs vulnerable to budget cuts along the entire value chain. In addition, community recycling costs are often subsidized by commercial recycling customers, as they typically generate more waste than households.

For recycling and waste management companies, the closure of businesses and restaurants has a direct impact on the amount of commerce available for recycling, with some of the country's largest haulage companies seeing significant declines in early spring. Waste Management, the nation's largest hauler of waste, has seen an overall 25 percent reduction in commercial volume, brentbell, the company's vice president of recycling, said in a July 8 webinar.

On the other hand, community waste has surged since the start of the pandemic related lockdowns, as more people work from home and buy consumer goods and products online.

In addition, restaurants have seen a surge in takeout orders as self-catering remains limited in most parts of the United States. Restaurants that traditionally serve their customers drinks in counter cups are offering bottled beverage takeout. As takeout orders have surged, so has the amount of food packaging waste, including PET, found in recycling bins.

However, because many municipalities have suspended their recycling programs during peak shutdowns due to labor shortages or tax dollars being diverted to other services, such as traditional garbage collection, much of this supply has never entered the recycling system.

As cities reopen, some local governments have permanently shut down curbside recycling programs because they have become too expensive amid shrinking tax revenues. As a result, a lot of recyclables now end up in landfills because landfill fees are often cheaper than the cost of disposing of recycled materials.

Despite these disruptions, the post-consumer PET market (the raw material for rPET chips) has not seen price increases because of extremely weak downstream demand for rPET fiber, which is often used as a polyester substitute and is produced primarily in the Midwest, amid tight supply.

With global manufacturing all but shut down in May, demand for bottling ingredients has plummeted. Much of the demand for the material comes from the textile, carpet, pipe and automotive industries, which are concentrated in the southeastern United States.

The recycled PET fiber market is more cost-sensitive than the bottling market because it is a low-cost, low-margin industry.

Prices in the Midwest PET market have been steadily declining since the outbreak, even as recyclers are disposing of inventory or stopping production altogether to tighten supply. The average monthly price fell to 7 cents a pound in July from 9 cents in April, according to S&P Global Platts.

As more curbside collection projects resume, recyclers find themselves in oversupply with limited demand. In addition, some large carpet manufacturers are suspending their nationwide voluntary subsidy schemes for carpet recycling, squeezing more money out of the value chain and forcing some processors and many carpet collection companies out of business.