If you follow us on social media, you know that we’ve been on the road in the last month at a number of industry conferences, speaking and interacting with suppliers and buyers of recycled materials. As we wrap up our conference season this year, we thought we’d share highlights of the questions and conversations we’ve had so far as insight into what’s on people’s minds.
Have more questions not addressed below? Check out our resources page for more on our research, capabilities and analysis of the industry, leave a comment with your question or contact us directly at support@circular.co.
What materials and markets are covered on the Circular platform?
Circular began as a platform to connect buyers and sellers of recycled plastic. Our platform now includes comprehensive supplier and market data on all recycled materials in all global markets. Buyers can search for material at any stage of the value chain and narrow to relevant results on specifications, certification, color, market prices and much more.
With the recent addition of other sustainable materials such as glass, paper and aluminum, Circular now supports manufacturers’ full portfolio of sustainable raw material spend, helping uncover wider opportunities for cost savings and sourcing efficiency gains.
Perhaps most notably, our powerful AI tools can be used to map data for any new market in just a few days. This advanced feature is fully customizable for subscribers and seems to be particularly relevant as supply chain volatility increases globally.
How does Circular acquire data on global plastic supply?
We have built a proprietary AI model and process that allows us to define a market (e.g. material + geography), gather data from websites, technical databases, research reports, academic papers and other sources, and then codify that data to make it reliable, standardized and consumable. On top of that data model, we then built analytical tools that allow buyers to access that data to develop supply chains that meet their needs with a few clicks.
What is your take on the concept of a green premium? Isn’t it a given that sustainable materials are more expensive than virgin materials?
Learn more about how we helped Walmart use AI sourcing tools to drive transparency, cost savings, and efficiency in just three weeks.
A green premium is a common perception (actually a misperception), but is certainly not a given. To understand what is and isn’t true, you need data from all materials in all forms, everywhere. That’s what we offer. Our platform data includes pricing information from our own transactions and all relevant indices. Standard indices consistently show a green premium of ~15-20% vs. virgin for “typical” recycled polymers in highest demand (rPP, rPE, rPET). This is a huge part of the reason that buyers, as responsible managers of their P&Ls, struggle to justify the business case to shift to sustainable materials.
However, in 100% of the searches buyers conducted on Circular, we’ve uncovered prices 10-20% below the relevant PCR index price, indicating that PCR is transacting at much lower prices than a buyer might initially expect. In fact, several of these searches have yielded prices below virgin, making it a financial imperative to shift to PCR.
At Circular, we feel this is a fundamental issue with the PCR market. Price opacity and volatility limit demand and result in buying decisions made based on inaccurate or irrelevant data.
Circular’s software provides pricing insights that inform buyers and suppliers about real transactional pricing, bringing more transparency and clarity to the process. In turn, we believe that this will drive increased demand for PCR, which benefits buyers and suppliers alike.
How does Circular “uncover savings” beyond what an experienced buyer of recycled plastic might achieve?
Circular achieves cost savings by eliminating inefficiencies in the market and ensuring that buyers get fast, accurate access to every possible relevant (i.e. matched to spec and vetted) supplier.
First, buyers can access the full market of relevant supply options, rather than relying on a handful of existing supplier relationships. Transparency and access offer opportunity and competition, which naturally drives down prices. Importantly, these prices are actually the prices that end up trading, not initial quotes for negotiation or for an indexed price report.
Second, with access to the quantity and quality of relevant supply options, buyers are no longer stuck optimizing for the short term through spot buys. They can establish long-term relationships with suppliers and, in turn, secure more favorable pricing and contract terms.
Finally, in some cases, Circular is able to aggregate demand for a brand across multiple sub-brands and/or its network of converters to take advantage of lower pricing from resin suppliers.
Overall, by accessing the entire relevant market, rather than a select few known suppliers, buyers can find opportunities that otherwise would have been hidden to them.
Can your platform help in this volatile economic environment?
You’d be hard-pressed to find a manufacturer or brand that is not re-evaluating its supply chain at this moment in time. From concerns about untenable increases in raw material costs due to tariffs to general economic uncertainty, buyers are taking action now to mitigate near and long-term risk.
Many have come to Circular to support that process by finding and evaluating alternative supply options for sustainable materials. In some cases, buyers are looking for opportunities to onshore their supply chains. In other cases, particularly in Europe and Asia, buyers are looking for cost opportunities as raw material prices potentially fall to compensate for tariffs.
In any scenario, Circular is a resource to 1) better understand real-time market opportunities and 2) be able to act quickly and efficiently to take advantage of those opportunities or implement risk mitigation strategies.
Not all sources of supply are created equal. How does Circular distinguish between high- and low-quality materials/ suppliers?
The key is data: Circular’s AI tools capture hundreds of thousands of data records from suppliers' technical data sheets and beyond that help signal quality and relevance, all of which is then verified throughout an automated sourcing process. The Circular sourcing workflow starts by instantly identifying suppliers that can meet a buyer’s very detailed specific requirements, such as Color, Melt Flow, Density, Tensile Strength, End-use applications, Certifications etc. From there, matched suppliers submit custom quotes through our digital RFQ process that include all specifications plus multiple quality signals such as feedstock source, cleaning methods, certifications and processing equipment – all of the things they would hear in person from a meeting with a sales rep. From this information, buyers can decide which supplier to progress to testing and compliance steps (all automated on the platform) before finalizing a contract with the supplier. Working in concert with our technology platform is a dedicated customer success team that help bridge any gaps in communication between all parties and ensure a speedy, comprehensive process.