Recyclers Face a Reckoning as Resin Prices Fall

Falling virgin resin prices squeeze US recyclers, forcing a reset on costs, policy and long-term strategy

19 Feb 2026

The US recycling industry is entering a period of adjustment as a sharp fall in virgin plastic prices reshapes competition for recycled materials.

Cheaper virgin resin has narrowed margins across the recycled plastics market, particularly for high-volume products such as PET and polyethylene. With new plastic supply exceeding demand, many buyers are reassessing procurement strategies and prioritising cost over environmental considerations. Market analysis cited by PlasticsToday suggests price volatility could continue into 2026, prolonging uncertainty for recycled resin producers and converters.

The pressure is already affecting operations. Some recycling facilities have scaled back output amid sustained pricing weakness, according to Recycling Today. Larger waste and recycling groups are responding by tightening cost controls, improving operational efficiency and investing selectively in infrastructure upgrades. The emphasis is shifting from rapid capacity expansion to improving performance at existing plants.

Executives say recycled plastics must compete on more than sustainability claims. Price parity with virgin resin, consistent product quality and clear supply chain standards are increasingly central to securing long-term contracts. Companies that can secure reliable feedstock, raise material purity and lower processing costs are seen as better placed to manage market swings.

Policy remains an important variable. The American Chemistry Council continues to call for regulatory frameworks that support advanced recycling technologies and incentives for recycled content. Industry advocates argue that clearer rules and stronger demand signals could stimulate investment, strengthen domestic manufacturing and support job creation.

Despite near-term challenges, structural drivers for recycling persist. Consumer brands face growing pressure from regulators, investors and customers to reduce plastic waste and meet circular economy targets. Those commitments are sustaining investment in collection systems and processing technologies, even as margins tighten.

The sector’s direction will depend on how quickly recycled materials can regain cost competitiveness and whether policy measures provide more stable demand. For now, the market is adjusting to a period in which environmental ambition must align more closely with economic reality.