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Recycling Markets 2013 Present and Future
Jerry Powell
Maryland Recycling Network
June 20, 2013
What we’ll look at today
• Assessment of market conditions
• Analysis of the role of exports
• A discussion of the impact of mergers and consolidations in the recycling industry
• A comment about deindustrialization
• A review of Operation Green Fence
MSW recycling volumes and rate
5.6 6.5 8.0 9.3 14.5 16.7
33.2
55.8
69.4
79.2 84.2
82.9 82.0 85.0
6.4% 6.2% 6.6% 7.3% 9.6% 10.1% 16.2%
26.0% 29.0%
31.7% 33.1% 33.2% 33.2% 33.80%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2007 2008 2009 2010
Perc
ent
of
gen
erat
ion
rec
ycle
d
Tota
l MSW
rec
yclin
g (m
illio
n t
on
s)
Total MSW recycling Percent recycling
Recycling rates for selected products, 2011-2012
96.2
71.6
57.5
66.8 65.1
35.5 29.9
33.4 29.1
2.5
0
20
40
60
80
100
120
Auto Batt. Newsprint Yard Scraps Steel Cans UBC Tires HDPE Glass PET Food Scraps
Re
cycl
ing
Rat
e (
Pe
rce
nt)
We have seen growth in collections
We have seen growth in processing
We continue to grow
0
100
200
300
400
500
600
700
'91 '96 '01 '06 11
U.S. MRFs
Recycling’s progress
Market demand and pricing grew from 2000-2007. And then we encountered the Great Recession of 2008-2010. While recycling rates were not severely affected, recovery economics became ugly.
Impact on exports in the first quarter of 2009
Material Volume Price
Paper - 14% - 22%
Plastics + 15% - 32%
Aluminum - 40% - 31%
Ferrous Scrap + 12% - 26%
HDPE milk jug bale prices
0
5
10
15
20
25
30
35
40
45
50
Aluminum can prices
0
20
40
60
80
100
120
PET bale prices
0
5
10
15
20
25
30
35
40
45
Recovered paper prices (18 grades; weighted average)
0
20
40
60
80
100
120
140
160
180
200
Old newspaper price
0
20
40
60
80
100
120
140
160
180
200
Ferrous scrap prices (No. 1 heavy melting steel)
0
100
200
300
400
500
600
Recycling’s progress
And we have seen a fundamental shift in critical recycling markets. The continuing rise in Chinese demand during a recession has resulted in systemic changes in the American recycling market.
Plastics exports
0
500,000,000
1,000,000,000
1,500,000,000
2,000,000,000
2,500,000,000
3,000,000,000
3,500,000,000
4,000,000,000
4,500,000,000
5,000,000,000
19
97
19
98
19
99
20
00
20
01
20
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20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Po
un
ds
Ferrous scrap exports
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
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20
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20
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20
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20
12
Po
un
ds
Recycling’s progress
The crunch created by high export demand and a crushing recession has been toughest on the domestic paper industry.
Paper collections continue
0
10
20
30
40
50
60
1993 1995 1997 2001 2003 2005 2007 2009 2010 2011 2012
Mill
ion
To
ns
Use of recovered fiber by U.S. paper industry sector
4.8%
30%
42%
48%
55%
0% 10% 20% 30% 40% 50% 60%
Printing & Writing
Newsprint
Containerboard
Paperboard
Tissue
Recovered paper exports
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Met
ric
Ton
s
2011 recovered paper market 2011
Marketplace
57%
43%
Versus 2010
-3.0%
+11.8%
+2.5%
Million Tons
30.5
23.2
53.7
Domestic
Exports
Total
Newsprint: a serious problem
North American shipments in million tons: 2007: 12.2 2008: 11.2 2009: 8.1 2010: 8.6 2011: 5.9 2012: 5.8 This is a loss of 50 percent over four years.
Paper recycling markets: Bankruptcies
AbitibiBowater Newsprint
Caraustar Paperboard
Newark Group Paperboard
Smurfit-Stone Paperboard
SP Newsprint Newsprint
.
Paper mill closures Blue Heron Oregon City, OR
Caraustar Chattanooga, TN
Caraustar Richmond, VA
Caraustar Charlotte, NC
Franklin Boxboard Franklin, OH
International Paper Albany, OR
Smurfit-Stone Missoula, MT
Sonoco Rockton, IL
Sonoco Lancaster, OH
Continued consolidation
More and more recyclables will be collected and processed by fewer and fewer players. Mergers and acquisitions will continue.
The impact
Big supplier Million tons/year
ReCommunity 1.8
Republic/Allied Waste 3.3
Waste Connections 1.0
Waste Management 12.9
The impact Big consumer Million tons/year
Abitibi-Bowater 2.0
Caraustar 3.0
Cascades 2.6
Georgia-Pacific 4.0
International Paper 5.0
Rock-Tenn/Smurfit 4.7
The impact
Steel company Processing plants
Commercial Metals 36
Nucor 58
Schnitzer Steel 42
Steel Dynamics 27
The impact
Paper company Processing plants
International Paper 33
Newark Group 11
Rock-Tenn/Smurfit 37
Sonoco 17
SP Newsprint 21
Continued consolidation
Top four metal processors handle 23 million metric tons per year
o Sims: 7.2 million metric tons o OmniSource: 5.8 million metric tons o Schnitzer Steel: 5.2 million metric tons o David J. Joseph: 5.0 million metric tons
Continuing deindustrialization
The lack of attention in the U.S. toward an industrial policy will hurt recycling. As piles of recyclables climb, states will be urged to, once again, launch recycling market development programs.
Continuing deindustrialization
Only 9.3 percent of American work force is in manufacturing. At one time, 30 percent of the work force was in manufacturing.
The U.S. added 937,000 jobs in 2010, while
Foxconn, China’s largest employer, added 300,000. The company now employs one million.
The green fence is real
This may become the year when recycling quality and the cost of recycling both rise, but for a good reason. China no longer wants to be the world’s dumping ground.
Chinese CRT glass processing
Resource Recycling Portland, Oregon
Resource Recycling Portland, Oregon
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