2024_0423_PWETC_Packet - Laserfiche WebLink

Home

Recycling Market Outlook for 2024 Prices for recycled material reached significant lows during the summer of 2023 but we expect them to level out in 2024. This past year saw reduced demand as companies were bracing for a recession. However, in the fall, as fears of a recession eased and inflation came under control, prices began to rise. End markets are hopeful that this increase will continue through this year — though typically during the post -holiday winter months pricing holds steady or slumps we did not see this usual trend in January. No one expects pricing to return to the highs we saw during the pandemic, but they are cautiously optimistic that the recession people feared last year has been averted. Eureka Recycling continues to have good relationships with our end markets and was able to move all our material in 2023 except for pop and beer boxes. We have at least three markets interested in each material except for pop and beer boxes (see more details on this in the paper section) and glass. We regularly get positive comments regarding the quality of the recyclables we sell. Additionally, we continue to focus on local markets when possible — in 2023, 69 percent of the material we processed stayed in Minnesota, 95 percent in the Midwest, and 99 percent stayed in the US. These business practices have been in place for years and reflect our values around the environmental, economic, and human impacts of recycling. Paper Markets: WestRock closing their cardboard line in the fall of 2022 deeply impacted the Minnesota and Midwest recycled paper markets during the beginning of the year. The closure of West Rock's cardboard line resulted in a lot of extra cardboard in the Midwest which contributed to a decrease in prices for this material. However, by mid -year markets had adjusted and demand has been strong, especially in Wisconsin. Some of the strong demand is due to a decrease in volume as people continue to reduce their paper usage at home and in the office and companies find ways to reduce the amount of cardboard and packaging they use. With the closing of the WestRock cardboard line we had no place to send pop and beer boxes for many months. We did find one market in the Midwest that turns this material into construction products (so it isn't turned into paper). We are evaluating the impact of this and continue looking for other markets that accept this material. Prior to the closing of the WestRock cardboard line, we sent pop and beer boxes to this line where it could be pulped for longer. Because of the extra plastic lining on pop and beer boxes, when this material stays with the paper it isn't likely to get recycled. When we remove it and ship it separately, some cardboard mills with the right equipment can pulp it separately for longer to separate the fiber from the plastic. We don't generate a lot of this material so we are currently able to move what we have but will continue to monitor this situation throughout the year regarding whether we can continue to accept this material. Plastics markets also had a volatile year and varied significantly by material type. Demand for PET bottles started weak and built up a bit in spring before falling dramatically in the summer — this summer dip in pricing and demand is consistent and is due to there being more bottles available in the warm summer months (when people drink more bottled beverages). Most markets believe we'll see a similar trend this year with pricing climbing a bit through the cold months but declining when it gets warmer. Eureka continues to engage with several brands directly about how to connect their corporate commitments to using recycled content with the actual supply chain to realize the flow of PET bottles back into PET bottles. Page 24 of 69