This is my dryer outlet, I noticed a plastic smell today and found this plus the side of cover was slightly melted. This can't be normal, does anyone know what might be the problem?
On a 30 amp breaker pole

Loose connection.
Creates very high resistance which in turn creates a TON of heat.
This happens yet the breaker does not see a rise in amperage so it does not trip.

I cut switched the hot wires but it still seem that the red wire connection is loose. Tried to fix it by closing the gap a little but its still kind of loose, think I should by a new outlet? This one is less than 6 months old.

Hi pribanic, if you can't get the connection tight, then it's time to buy a new outlet. Good luck

The loose connection has now damaged the terminal, a new outlet is needed, and connections need to be tighten properly to avoid any future loose connections, and damage to the new outlet.