2026 has been another year of volatility for recycled commodity markets. As the industry prepares for the Paper and Plastics Recycling Conference in Chicago and looks toward 2027, we reflect on what the past eighteen months have revealed to inform what comes next, and how we can prepare.
Fiber: A Cautionary Recovery
Following a difficult 2025, recovered fiber markets have performed well this year. According to Recycling Today, OCC prices reached a low of $44 per ton in December 2025, a level not seen since 2023, and have risen steadily since. As of mid-October, Resource Recycling reported that the national average for OCC held at $91 per ton, compared with approximately $50 to $55 per ton one year earlier.
Much of this recovery in value has been driven by the supply side. Fastmarkets estimates that approximately 3.9 million tons of U.S. containerboard capacity, roughly 10% of the total, was permanently removed between February 2025 and March 2026. Analysts cited by Recycling Today have also identified slow domestic generation, freight concerns, and elevated oil and gas prices associated with conflict in the Middle East as contributors to this Fall’s price increase.
“We have seen a steady increase in price for several fiber grades over the last fifteen months,” says Todd Shumaker, President of Commodities and Brokerage at Circular services. “That history leads us to expect a price drop, as markets rarely move upward in a straight line.
“We are seeing less inbound volume at our facilities and across our suppliers,” Shumaker explains. “That has kept markets relatively stable, because supply and demand are fairly balanced. However, we are one disruption away from an imbalance. A single mill shutdown, for example, could move the market in either direction. It would not take much to destabilize conditions.”
Demand-side forecasts support a measured outlook. In its North America containerboard quarterly, RaboResearch projected a slow but steady recovery in containerboard demand, at a 1.5% compound annual growth rate through September 2027, with the majority of that recovery expected in late 2026 and into 2027.
Plastics: A Volatile Year for PET, Early Momentum for Polyethylene
For PET, 2026 has been one of the most challenging years in two decades. As reported by Resource Recycling, The Recycling Partnership stated that the United States had lost approximately 25% of its PET reclaiming capacity, with companies including Evergreen Recycling, Alpek, Phoenix Technologies, and rPlanet Earth closing some or all of their capacity, citing inexpensive virgin resin imports and weak demand. Those closures drove PET bale prices to near zero or lower as bales flooded the market.
“Processor closures sent the PET market into a sharp decline this year,” says Shumaker. “Looking ahead, we do not see any development on the horizon that would drive a strong PET recovery in 2027.”
The Strait of Hormuz closure spiked the cost of crude oil, increasing the value of rigid polyolefins. In October, Resource Recycling reported that the national average price for natural HDPE rose from 36.50 to 40.25 cents per pound, color HDPE increased from 8.66 to 11.13 cents, and post-consumer PP rose from 6.06 to 7.19 cents. “The polyethylene market has also faced difficulties, but we have seen meaningful momentum in the fourth quarter of 2026,” Shumaker notes. “We anticipate that this will continue into 2027.”
Freight: The Defining Market Factor of 2026
If one theme has defined 2026, it is the cost of transporting material. Diesel reached a record high of $6.53 per gallon on September 22, according to AAA data, nearly $3 higher than one year earlier. Between late August and September 21, at least 16 trucking, delivery, and transportation companies entered bankruptcy proceedings, according to FreightWaves, as reported by NewsNation.
The recycling industry is experiencing these effects directly. One mill executive told Recycling Today that trucking costs are now two to three times their former level. Regional impacts are particularly pronounced for plastics. Resource Recycling noted that in the Upper Midwest, which is located far from the largest converters, persistently high diesel prices can limit purchasing to local suppliers.
“We are seeing significant freight increases, often double the previous cost, and that is a concern for our processors,” says Shumaker. “There are fewer trucks on the road. Carriers are unable to raise rates quickly enough or recruit sufficient drivers, and we expect this to remain an issue. Decisions that were sound a year ago are no longer viable, so processors are scaling back and adjusting their operations.”
Priorities for MRFs in 2027
Based on these conditions, Shumaker recommends four priorities for MRF operators and recycled commodity suppliers entering the new year.
- Maximize load efficiency. “Ensure that you are shipping heavy loads,” Shumaker advises. “Be efficient in your logistics, maximize load weights, and minimize freight cost per pound.” When freight costs can determine the value of a load, every pound on the truck matters.
- Engage buyers on freight now. “This is the time to discuss freight allowances and fuel surcharges with your buyers,” Shumaker states. “Some allowances were negotiated at the beginning of the year, before these increases took effect. If we do not address this together, it will have a negative impact on the market.”
- Compete on quality, particularly in PET. When supply exceeds demand, buyers are able to be selective. “In down markets, quality becomes the differentiator,” Shumaker explains. “That may require additional steps, such as bale picking to remove residue and contaminants. Producing a high-quality product is how you keep material moving, and it creates an opportunity for premium pricing.”
- Protect relationships rather than pursuing the spot market. “There are times when we support the paper mills, and times when they support us,” Shumaker says. “When markets improve, some suppliers leave the partners who supported them during a difficult market in exchange for a marginally better price elsewhere. Relationships are essential. It is important to remember who supported you when conditions were challenging.”
Our Approach: Focus on Recovery & Movement
At Circular Services, our strategy is designed for precisely this type of environment. We maintain strong relationships with the mills we serve, and our team of experienced commodity traders understands how to navigate changing conditions. Long-term off-take agreements cover a significant share of the materials we handle, which helps protect our partners from short-term market volatility.
“We cannot control the price,” Shumaker says, “but we can control the movement of materials. We keep it moving.”
Whatever 2027 brings, the fundamentals remain constant: efficient logistics, high-quality materials, and long-term partnerships. We look forward to continuing this conversation in Chicago.
