U.S. scrap recyclers threatened by rising recycling costs and falling scrap demand and prices

In the U.S. recycling used to be extremely profitable business while aiding while doing its part to the environment. However, local recyclers are facing a number of challenges while recycling holiday packaging materials. Local recyclers are struggling to cope with increasing financial pressures involving plunging prices for scraps, higher trucking costs, increasing difficulties with consumers sorting trash, and concerns about President Donald Trump’s trade wars.

“The value of (recyclable materials) has dropped sharply over the past few months,” said Frank Chimera, senior manager of Republic Services, which services Chester County. He sees an increase of 20 per cent in recycling demand over the holidays but sees that exporting scraps have become difficult.

“China, who was the world’s largest consumer of recycled materials, has all but stopped accepting those materials.”

China, which used to import more than US$5.6 billion worth of recyclables from the U.S., has now imposed about 50% tariffs on import of scraps from U.S. and many recyclers in China have refused to take any scraps from the U.S. This had a strong impact in the global as well as the U.S. scrap market bringing down prices for recycled aluminium, paper, plastic and other materials.

This led to consumers paying much more for recycling their scraps. Chimera said that the average recycling customer regardless of hauler is paying between US$1.50 to US$4 more per month than they had earlier this year, while trash costs on the consumer side have seen no significant change. And the costs will continue to increase drastically in 2019, Chimera predicts.

“It appears the China market will just not change all that drastically,” Chimera said.

Contaminated scraps which are not properly sorted are tough to be recycled and are disposed in landfills. Recyclers have to pay to sort it out and haul it to a landfill. Single-use plastic bags jam equipment that is designed to sort out aluminium, paper and glass creating more problems for scrap dealers. Recycling firms are passing on the cost of sorting to their consumers in the form of rate hikes.

Additionally, the Trump administration’s trade wars with China and other countries that are potential importers of scraps is now hurting prices for used aluminium beverage cans.

“Many of us want to be better recyclers during the holidays, but we aren’t sure how or just don’t have the time,” said Pete Keller, vice president of recycling and sustainability at Republic Services.