2021_05-25_PWETCpacket - Laserfiche WebLink

Home

Recycling Market Outlook for 2020 2019 has been a difficult year for the sale of recyclable materials. From a zero -waste perspective we appreciate the efforts China has made to insist on quality materials and build their internal recycling system. In the long run, this could help the U.S. clean up our recycling stream and build up our capacity to recycle plastics and paper domestically. The investment in over 15 new or retrofitted recycled paper facilities across the US shows a coming increased capacity but it is yet to be determined how exactly these investments will impact capacity and pricing for both paper and plastics. There were predictions that China's National Sword and Blue Sky policies would impact plastics pricing, and in 2019 we did start seeing that impact in some (but not all) plastics pricing. Additionally oil and natural gas prices have continued to be low and there has been significant investment in building virgin plastic manufacturing infrastructure, and both of these factors depress prices for post -consumer recycled plastics. Particularly natural gas infrastructure and subsidies in the US have continued to create low pricing for both virgin and recycled plastic. Increasing commitments by brands for use of recycled content is showing potential to increase demand for recycled content and thus result in increased pricing for recycled plastics and recycling infrastructure. The average amount of recycled content in plastic bottles is below 3% and thus there is tremendous opportunity here in regards to developing recycling markets. In addition, several states and the EU are moving forward with recycled content mandates which will have the potential to increase demand for recycled plastic. Despite these contexts globally and nationally, we continue to see record low pricing for PET plastic. On the other hand, we have seen a significant increase in HDPE Natural pricing, and discussions amongst market players note that this increase is connected to increased demand from brands for recycled content. Metals markets were thrown into chaos the fall of 2018, and that volatility continued through 2019. This depression was caused by a few different factors including: • one of the major aluminum markets deciding to close one of their aluminum can manufacturing facilities, thus flooding the market with aluminum cans that had limited places to go, • the uncertainty around tariffs which discouraged businesses from making investments and made it difficult to consistently market metals to other countries, • one aluminum market buying cheap aluminum overseas from a country not impacted by the tariffs to make their product and then flooding the market with their scrap, • and the decreased production in the auto market which has historically been a large purchaser of recycled steel and aluminum. We expect the metals market to continue to decrease at least through the beginning of the year and are unsure of what will happen long term. There are plans to increase beverage can manufacturing in the U.S. but it will take a few years before that has an impact on aluminum demand so won't impact pricing in 2020. Trucking also continues to impact pricing negatively as there is a shortage of truck drivers and much stricter limits on how long they can drive. This is increasing the cost of transportation which can negatively impact pricing— especially for materials that are shipped out of state such as tin and aluminum.