You may have read of the downturn in recycling markets in the past few years. This has a far reaching impact, from the recycling and solid waste management companies, all the way to your home recycling bin.
Let’s take a look at four negative factors affecting the recycling markets in 2016:
1 – Market Slowdown in China: Whenever a conversation takes place regarding recycling markets – it typically begins with one word, CHINA. China is by far the largest consumer of recycled commodities in the world. In the past 30 – 40 years much of the world’s manufacturing base has moved or been relocated to Asia– to take advantage of cheap, yet qualified labor and technology. It makes sense that if products are being manufactured in Asia, mostly often China, then so should the packaging. Paper manufacturing in this area of the world has boomed. This fast growth of China’s economy also spurred dramatic demand for steel, copper, and aluminum, all products used to fuel this growth. With a majority of the recycling industry’s “eggs in one basket”, when China’s economy slowed so did the demand for these commodities, and prices plunged.
2 – “Soft” Markets: Now consider the $12 million dollars a company invested in a single stream recycling facility in the US. These operations survive by selling the commodities they collect and sort. If the market value of the paper, steel, aluminum, and plastics drop by 30-50%, these operations can bleed dollars. They are forced to quickly renegotiate contracts, and search for ways to reduce costs, and improve the quantity of the material which they generate. It is a commonly known fact in the recycling industry – when markets are “soft”, and supply exceeds demand – foreign buyers become particular about the material they are buying. They no longer need to tolerate contaminated material – and commonly reject loads they have accepted in the past. This puts further strain on the US based recycling markets, and recyclers that are trying to remain profitable.
3 – Crude Oil Prices: On top of this add the dramatic drop in crude oil pricing in the last 24 months. The base material used to produce plastic is oil. As oil drops so does the price, (and demand), for scrap recyclable plastics. (Many plastic buyers back away from scrap when pricing drops – as virgin material is much more attractively priced – and does not contain the problems associated with contamination.)
4 – Challenges with Glass: Waste Management recently announced that they will no longer be accepting glass in their single stream collection program in Houston, TX. They stated that glass is no longer profitable to recycle. This is not only due to the low value of glass and the difficulty with generating a marketable and recyclable product after it is commingled, and sorted from six other commodities – it is also an attempt to reduce their operating cost. When glass is collected, dumped, and processed through a single stream facility, much of the material breaks, causing contamination to other grades of recyclables, accelerating wear and tear on systems, and also creating an unmarketable – contaminated residual waste – that can only be landfilled – at considerable cost.
As stated in the beginning of this article – impacting the way you recycle at home…
Interested in recycling or obtaining more information for your organization? Find out how Miller Recycling can help – visit our web site at www.millerrecycling.com, or our blog at http://millerrecycling.com/blog/
About Miller Recycling Corporation
Operating since 1940, Miller Recycling is a fourth generation company with the experience required to assist with all your paper, plastics, metals, and e waste recycling requirements. Northeast Data Destruction, our NAID “AAA” Certified confidential shredding division, will securely process all your sensitive documents, files, media, hard drives, tapes, CD’s, off spec products and storage components. Call us at 1-800-783-6766 for more information.