The Story of Recycling in 2016

Dylan de Thomas,Resource Recycling

MassRecycle R3 2016 Recycling & Organics Conference

Mar. 29, 2016

About Resource Recycling, Inc.

About Resource Recycling, Inc.

Recycling is Dying…

And It’s All Glass’ Fault

And It’s All Oil’s Fault

And It’s All Single-Stream’s Fault

And It’s All Our Fault?

What We’re Talking About Today• Why is the Sky Falling?• Going Global• From MRFs to Markets• Sustainable Materials

Management• Partnering Up for Next Steps

Recycling Commodity Markets Overview

The Big Picture • Strong dollar +• Excess production of crude and

other commodities +• Changes in China +• = Down market, disappearing

margins, hurting industry

Strong U.S. Dollar

Low Oil Prices

Source: New York Times, Mar. 24, 2016

Excess Capacity

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020-2,000.0

-1,500.0

-1,000.0

-500.0

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

----

10

20

30

40

50

60

70

80

90

DAK Indorama M&GNan Ya Selenis Eastman

Operating Rate, Percent

North American Capacity Growth

© 2016 IHS

Mill

ion

Met

ric T

ons

Source: IHS

Recycling Commodity Markets Overview

It’s Not Just the Green Fence…

Context of China

China’s Working-Age Population Peaking

Source: United Nations World Population Prospects

Going from this:

China’s Shifting Labor Landscape

To this:

China’s Shifting Labor Landscape

From this:

China’s Shifting Labor Landscape

To this:

China’s Shifting Labor Landscape

Which Leads (In Part) To…

Aggregate Scrap Material Values

Source: Institute of Scrap Recycling Industries, 2016

Value of a Commingled Ton

Source: Scott Mouw, NC DNER, 2016

Sprin

g 201

1

Summer

2011

Fall 2

011

Winter

2011

/12

Sprin

g 201

2

Summer

2012

Fall 2

012

Winter

2012/13

Sprin

g 201

3

Summer

2013

Fall 2

013

Winter 201

3/14

Sprin

2014

Summer

2014

Fall 2

014

Winter

2014-1

5

Sprin

g 201

5

Summer

2015

Fall 2

015

Winter

2015

/16 $-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

$180.00

From MRFs to Markets

Growth of Single-Stream Processing in No. Am.

Source: Government Advisory Associates, Inc., 2013& Resource Recycling, 2016

Single-Stream MRFs in the U.S.

• Map

Source, Resource Recycling, 2013

Increasing contamination

• According to WM figures, contamination of loads is an average of 16% of inbound tons.

• Contamination can be up to 50% of incoming loads• Processing costs continue to increase as markets demand reduced

contamination. This drives up cost to customers.

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%Contamination Percent

Inbound Tons Residue %

Source: Waste Management, 2015

The Evolution of Packaging

From steel can, paper label adhesive to multi-layer, foil-lined flexible film pouch

From glass jar, metal lid and paper label adhesive to multi-layer, multi-resin pouch with PP enclosure

The Evolution of Packaging

Coffee

Cookies / CrackersPharma /

Over-the-counter

Personal Care

Pet Food

ShavingJuice

Baby Food & Formula

Nuts

Reframing Recycling in Sustainable Materials Management

SMM & Recycling

Source: Oregon DEQ, 2015

Growing Partnerships

Growing Partnerships

And the Good News Is…• SE Asian Markets

Growing• Markets Cyclical• Low Oil Also Means

Fuel Savings • Increased

Partnerships/Industry Engagement

• Innovations Abound• Acting Local…

And Thank You!

Dylan de ThomasEditorial Director

Resource Recycling, Inc.dylan@resource-recycling.com

503-309-5142Resource-Recycling.com