Much has been said recently regarding the recycling commodity markets. It is common knowledge now that China shut their borders to all recyclable mixed paper and low grade plastics in January of 2018, and lowered contamination levels to almost unachievable levels on cardboard. Since then it has become considerably more difficult to market recyclables. And as we know without a market there is no recycling.
Recycling has and always will be controlled by a supply and demand marketplace. Material cannot be recycled without an established long term end market. Without this you are just “collecting”.
Once China shut their doors other markets had to be found. A majority of this material went to India, Malaysia, or other export markets. These alternative markets are now beginning to refuse this low grade material for the same reasons China did: contamination.
Many suppliers and processors made a best effort attempt to clean up this material, notifying suppliers and municipalities that contamination had to be eliminated. Their hope was to generate a marketable product that could find alternative outlets, potentially even domestic markets.
Unfortunately, we have experienced a slowdown in domestic demand during 2019. One major east coast mill was lost to fire early this year. Another mill group recently shuttered two additional recycle mills. There is the promise of additional consuming mills coming on line, but this will take 2 to 3 years to have a positive market impact.
There is also discussion of a recession possibly impacting the US in the near future. Should this happen it will result in less raw material demand. Mills typically take downtime or run reduced production hours in recessionary markets. Again, lack of demand for finished products results in lesser demand for raw material – the recyclables used to produce these finished products.
I am sure many recycling processors will agree we are experiencing some very challenging times in our industry. The future is unknown and markets continue to change on almost a daily basis.
Despite all of this, Miller Recycling remains strong. We are offering competitive pricing given today’s market conditions, and are continuing to invest in our facilities, technology, people, and safety. We are a 78 year old, four-generation company that has endured many markets, and we’ll continue to provide Solutions for a Healthy Planet for many more years to come. Contact us to discuss how we can help you with your metals recycling.