2018_04-24_PWETCpacket - Laserfiche WebLink

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Global, Regional, and Local Market Conditions Affecting Prices Recycled materials are commodities just like other products such as, corn, cotton, and oil. In our modern global economy things that happen near and far can impact the prices paid for material on the open market. The following are the major factors influencing the prices paid for recycled materials. Some are very local issues affecting glass prices. Others are more global in nature and involve the economies of other countries like China. Summary of Current Market Conditions This is a summary of markets and our outlook for 2018 based on discussions with end markets and industry professionals. Please note that, as all projections, these could be inaccurate since recycling markets are now a global commodity that is impacted by many diverse forces including, politics, global economics, pricing around oil, mining, shipping, weather, consumer behavior, and more. Non -Material Specific Impacts to Markets: China's National Sword Policy: In the Spring/Summer of 2017 China let the World Trade Organization know that it was going to implement a new policy called National Sword aimed at reducing the amount of contaminated material shipped to their country and improve their own internal recycling infrastructure. We continue to market the vast majority of our material regionally (80-85% in MN), but are still impacted by the price -swings this is causes industry- wide. However, the high quality of our material and the way the City has only added materials with robust markets has helped mitigate these market conditions. There was a short term spike in fiber pricing over the summer as firms in China rushed to purchase as much paper (especially cardboard) as they could before the policy was implemented. Although the policy is not going to be officially implemented until March 2018, China stopped issuing permits for material in mid-September. This meant that US Mills became flooded with fiber that normally would have been shipped to China. When there is more supply (fiber) than demand (mills that need fiber), prices fall and that is what happened in October when the average price for fiber fell 30 — 50%. In November we've seen cardboard pricing continue to fall 10-15% but fortunately other paper markets have held steady for this month. So far, we have seen most of the impacts of National Sword on fiber pricing but China is also halting the import of mixed plastics. As a result we've seen a slight dip in pricing for tubs and lids (mostly #5 plastics) as US Markets are getting material that was previously going to China. There has also been indication that HDPE and PET pricing could fall if MRFs start sorting more of their plastics and sending the sorted material to US Mills. In the first months of 2018 we are continuing to see lower prices paid for materials as China continues the National Sword policy. It is difficult to predict when or if China will step back from the quality standards.