Bad Year For Plastic Recyclers
Industrial recyclers of products such as recycled paper, recycled plastics, metal and glass are having a terrible year.
Typically, they get paid by cities to haul and process recyclable waste. But they also earn money from selling the valuable commodities they extract from this household waste to industrial users. These commodity markets are in a slump.
A China policy change announced in 2017 — called the “National Sword” — banned several types of recyclables from importation. Imports of mixed and otherwise difficult-to-recycle paper, plastics and metals nearly ceased, dropping to about 1 percent of their previous volume by 2019. Without an easy market to sell to, parts of the U.S. commodity market have been in price free fall or a period of readjustment, or they’re just broken.
The effect of this slump on secondary commodity markets is both financial and environmental.
Although much of the reporting on the China ban has focused on plastics, the biggest effect financially for the nation’s second-largest recycler, Republic Services, has been because of paper products, according to Peter Keller, vice president of recycling markets for Republic.
Paper makes up 75 percent by volume of what Republic receives from household bins and traditionally sells to wholesalers. Partly because of China’s changes and other factors, this market has tanked in the past two years.
Recycled cardboard used to sell for $200 per ton but now goes for $30 per ton. In addition, households now recycle small cardboard boxes from Amazon, which many recyclers are ill-equipped to process, compared to the flow of larger cardboard from retail stores just 10 years ago. They recover less, and get paid less, for cardboard than in the past.
“Mixed paper,” a catch-all product that used to sell for $110 per ton in 2017, now costs negative $5 per ton. In other words, a recycler like Republic has to pay a wholesaler to take the tons of mixed paper it processes off its hands. What used to be a source of profit is now a source of loss.
A third paper product is newsprint. With the national decline of the newspaper business, demand for newsprint has dried up. Your soon-to-be recycled newspaper — perhaps the paper you’re reading now — goes into the “mixed paper” stream, with limited to negative monetary value today.
I puzzled over how to make a grim metaphor combining the challenges facing the newspaper industry, something about training your new puppy as the best secondary use of this column, and the declining value of newsprint as a commodity. I couldn’t manage to make it funny, though, so let’s move on.
Secondary metal continues to be a solid B+ student in an otherwise failing recycling class.
Bundles of clean soup cans that contain steel command secondary prices around $120 per ton, down from $150 per ton a few years ago. Bundles of clean soda cans that contain aluminum command secondary prices of something like $1,050 per ton, down from $1,400 in 2017.
At these still relatively high prices, soup and beverage cans, even though they do not make up the majority of your recycling bin, can be a significant driver of the overall profitability of a recycling program.
Finally, there’s glass. For a long time now, glass has been the class troublemaker in a recycling bin. While glass is infinitely recyclable, producing new glass from scratch (well, sand) is generally cheaper than using recycled glass materials.
From a commodity-markets perspective, it is puzzling, then, that the city of Houston reintroduced curbside glass recycling this year after a three-year hiatus.
Glass that comes through a traditional curbside bin has a negative value of $10 per ton, according to Keller.
Secondary glass is only financially viable as a recycled commodity when sorted carefully by color and somehow cheaply transported to a nearby glass manufacturer, if one exists. If the glass could be cleaned, color-sorted and delivered to a manufacturer, Keller said, it could fetch as much as $100 per ton. But getting to that result costs too much.
When glass comes in mixed from a household bin, by contrast, it’s not salable for a profit, it costs a lot to move because of its weight, and it often contaminates other recycled materials. Think paper products with tiny glass shards. Now how much would you pay? So it’s a loss-maker.
Sarah Mason, the division manager for recycling at Houston’s Solid Waste Management Department, defended Houston’s decision to reintroduce glass, saying the city’s new recycling partner has custom-built its facility to handle glass more efficiently, hopefully reducing the contamination problem.
And then there’s plastics, which have garnered 95 percent of the headlines but constitute about 7 percent of Republic’s revenue stream.
Even after the China policy change, three types of plastic still have a viable wholesale commodity market, and these markets track the plastic number you’ll find marked on your household plastics.
In brief, Nos. 1, 2, and 5 still command decent prices as long as they can be separated and processed cleanly. Plastic No. 1 — your basic single-use water bottle — can be sold for $250 per ton now, down from about $325 a few years ago. Plastic No. 5, consisting of heavier plastics, has held steady at $150 per ton, while plastic No. 2, made up of milk jugs and detergent bottles, is up slightly in some markets.
Other plastic numbers are virtually unsalable at any price as a secondary commodity following China’s policy change and will go to a landfill.
All these prices should be understood as varying geographically as well as by purity. A recycling processor that can produce a homogeneous ton of product will command high prices, while a mixed or contaminated product will sell for less, if at all.
Everyone I’ve spoken to in recent weeks expresses the hope that as technology and markets change, some of the broken parts of the recycling market can improve and heal. New and better sorting technology at the recycling processing plant could turn previous trash into viable secondary commodities, although it may take a combination of capital investments, time and improved engineering to get there.
Nara Loca Abadi is a recycled plastic specialist that concerned about the earth and environment by promoting the use of recycled PET flakes, recycled PET chips, recycled PP & HDPE granules to various plastic and polyester manufacturers.