Recycling Markets: A Look at Trends Amid Global Trade...

Recycling Markets:

A Look at Trends Amid Global Trade Realignment

ASTSWMO Joint Hazardous Waste and Materials Management Training

Hilton Milwaukee City Center, Milwaukee, WI

August 13, 2019

David L. Wagger, Ph.D.

Chief Scientist / Director of Environmental Management, ISRI

• ISRI Introduction

• U.S. Recycling Industry

• Recycling Industry Fundamentals

• Recent Trends in Scrap Trade

• North American Market View Ahead

• ISRI’s Initiatives and Partnerships

• Review

Copyright © 2019 Institute of Scrap Recycling Industries. All Rights Reserved.

Contents

2

Voice of the Recycling IndustryTM

4,000+

41Countries

Members Locations

©2018 ISRI, Inc.

1,300+

Ferrous & non-

ferrous metalsPaper Plastics Tire &

Rubber

Textiles Electronics

Manufacturers,

Processors

Industrial Consumers,

Brokers, Traders,

Equipment/Service

Providers


3

Workplace

Safety

Market Intelligence

SpecificationsEducation,

Training &

Networking

Responsible

Recycling

Awareness

OUR MISSION

Design for Recycling™

To promote safe, economically sustainable & environmentally

responsible recycling through networking, advocacy &

education.

Free & Fair

Trade


4

Voice of the Recycling IndustryTM

©2018 ISRI, Inc.

125,000,000+ Tons processed annually

Iron/Steel 66.0 Copper 1.9 Plastics (bottles) 0.8

Paper 46.1 Lead 1.1 Electronics 5.0+

Aluminum 5.3 Zinc 0.07 Tire (#) 110

In millions of tons (or other unit shown). 2017 Data (except Plastics and Tires, 2016)

$117B Economic activity $13.2B federal, state & local tax revenue


5

U.S. Recycling Industry: A Snapshot

1. Recycling is a Commodities Business Driven by Demand

– ISRI’s Scrap Specifications play a key role

• Provide the global standard for consistency & quality

• Reflect tolerances allowed by materials manufacturers

• Common language

• Inbound MRF Specifications Expected in 2019

6Copyright © 2019 Institute of Scrap Recycling Industries. All Rights Reserved.

Recycling Industry Fundamentals

2. Recycling is far more than residential recycling … it is “Bigger than the

Bin”.



3. Recycling is a Global Business.

– Total Global Scrap Consumption = 800 million metric tons

– Total Global Scrap Trade = 180 million metric tons

– The U.S. and China are/were key players in the global scrap market.

• Total Exports from U.S. to 155 Countries = 37 million metric tons

• Total Imports into China from World = 43 million metric tons



June 2018: China announces intention to ban

“solid waste” imports by 2020; but recent draft

change to law softens this.

July 2017: China Ban on post-consumer

24 categories [mixed paper; residential

plastics; eff. 1/1/18]

March 2018: final carried waste

standards take effect; remain

below global stds U.S.

Recycling

Industry

Brands want their products deemed

recyclable & able to go through the

residential recycling stream2019: Ban on post-industrial

scrap & category 7 metals

Long term contracts without flexibility to address

current conditions

Wishcycling

US-China Trade War

China imposes retaliatory tariffs on scrap (25% for all, 50%

on Al scrap); U.S. scrap suppliers facing retaliation in form of

export license renewal delays

Public confusion

What can go in the bin? What

can’t?

August 2017: China proposes

“carried waste” standards on ALL

scrap at levels far below global stds

Processing equipment/infrastructure designed to

produce grades for which there is no longer demand

Time needed to create demand

within the U.S.

Recycling equipment mfg report sharply improved

equipment orders; therefore sig. delivery delays

Lack of consistent messaging;

uniform labeling

Enforcement varies from community

to community

Freight costs/driver shortages

Chinese State Council Policy Statement

of 2017 Still Reigns

Exposes Domestic Challenges

Prices for certain banned commodities (e.g.,

mixed paper) have plummeted, forcing review

of municipal recycling programs

May 2019: Suspension of CCICNA for one month

- complete halt of scrap exports to China

©2018 ISRI, Inc.

9

Pressures Placed on U.S. Recycling Industry


2020: Ban on SS scrap &

nonferrous scrap (ex Al & Cu)

6

8

10

12

14

16

18

Per

cen

t

Total Unemployed + marginally attached and part-time for economic reasons (U-6)

*Bureau of Labor Statistics via St. Louis FRED


10

Other Pressures: Tight Labor Markets

©2018 ISRI, Inc.

U.S. Scrap Exports to Mainland China

Jan-June

20184.81 mmt

Jan-June

20193.27 mmt

YTD % CHG -32%

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

U.S. Exports of Scrap Commodities to China 1996-2018 (metric tons)*U.S. Census Bureau // U.S. International Trade Commission

China’s accession to the WTO

Great Recession

Operation Green Fence

Blue Sky


11

Snapshot of Scrap Trading with China

“Scrap plastic exports

plummet 43% this year,

paper stable”

(Resource Recycling News,

August 6, 2019)

©2018 ISRI, Inc.


12

Recent Exports to China: Mixed Paper

0

50,000

100,000

150,000

200,000

250,000

Jan

Fe

b

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

Oct

Nov

Dec

Jan

Fe

b

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

Oct

Nov

Dec

Jan

Fe

b

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

Oct

Nov

Dec

Jan

Fe

b

Ma

r

Ap

r

Ma

y

Jun

2016 2017 2018 2019

Monthly U.S. Mixed Paper Scrap Exports to China (metric tons)*U.S. Census Bureau/U.S. International Trade Commission

Recent Exports to China: Plastics

©2018 ISRI, Inc.


13

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000Jan

Fe

b

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

Oct

Nov

Dec

Jan

Fe

b

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

Oct

Nov

Dec

Jan

Fe

b

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

Oct

Nov

Dec

Jan

Fe

b

Ma

r

Ap

r

Ma

y

Jun

2016 2017 2018 2019

Monthly U.S. Plastic Scrap Exports to China (metric tons)*U.S. Census Bureau/U.S. International Trade Commission

Not Just U.S. Exporters Who Are Hurting

©2018 ISRI, Inc.

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Jan.2017

Feb.2017

Mar.2017

Apr.2017

May.2017

Jun.2017

Jul.2017

Aug.2017

Sep.2017

Oct.2017

Nov.2017

Dec.2017

Jan.2018

Feb.2018

Mar.2018

Apr.2018

May.2018

Jun.2018

Jul.2018

Aug.2018

Sep.2018

Oct.2018

Nov.2018

Dec.2018

Jan.2019

Feb.2019

Mar.2019

Apr.2019

European (EU-28 incl. UK) Scrap Exports to China (metric tons)*Eurostat

Plastics Paper Ferrous Nickel/Stainless Aluminum Copper


14

Trade diversion keeps materials moving…

Re

co

ve

red

Pa

pe

rPla

stic

s

Source: U.S. Census Bureau / U.S. ITC

CountryFAS Value/Metric Tonnage % Change

(Jan-June)2017 2018 Jan-June 2018 Jan-June 2019

Indonesia$8,307,152 $9,247,584 $2,731,091 $7,478,758 174%

29,175 27,385 8,468 17,940 112%

Malaysia$31,472,356 $57,682,689 $45,192,592 $6,091,756 -87%

121,125 204,120 157,756 20,209 -87%

Thailand$10,772,518 $43,338,915 $36,971,442 $3,591,428 -90%

32,862 106,853 91,438 11,608 -87%

Vietnam$49,389,260 $27,433,415 $23,959,981 $3,370,496 -86%

137,042 74,396 70,560 9,041 -87%



Indonesia$76,869,462 $148,560,435 $57,524,231 $78,463,363 36%

440,418 1,160,870 443,753 617,247 39%

Malaysia$4,423,641 $17,801,478 $3,466,479 $12,155,913 251%

23,569 111,767 24,833 87,041 251%

Thailand$41,992,638 $58,267,854 $19,166,267 $34,694,878 81%

282,221 468,632 153,971 289,550 88%

Vietnam$58,125,566 $112,469,273 $49,094,438 $64,788,923 32%

399,652 765,880 362,426 488,594 35%


15

Alternative Markets

…but illegal demand pull results in a policy backlash.

Re

co

ve

red

Pa

pe

rP

last

ics

Source: U.S. Census Bureau / U.S. ITC

Although the largest growth market, India grapples with its

own domestic collection problems.

Country FAS Value/Metric Tonnage % Change (Jan-June)

2017 2018 Jan-June 2018 Jan-June 2019

India$58,336,236 $50,065,543 $26,469,445 $26,315,728 -1%

123,116 133,299 69,725 70,777 7%



India$377,874,613 $531,077,913 $281,589,186 $271,124,328 -4%

1,926,002 3,337,998 1,813,330 1,597,199 -12%


16

Alternative Markets

Future Global Trade Pressures

• China as eventual net-exporter of scrap material

• Reactive import restrictions across Southeast Asia will continue and

strengthen

• Basel Convention Decision on Certain Plastics (Eff. 01/01/21)

– OECD’s potential adoption of Basel Convention Decision


North American Market View: Paper

• Since China’s ban on mixed paper (MP) and 0.5% limit for old

corrugated containers (OCC)

– At least 17 NA mills designed or converted to use MP or OCC on-line since 2018 or

scheduled on-line by 2021

– Best case: adding 3.5M tons of new OCC/MP processing capacity from 2018-2021

– Incentives to use MP, vs. OCC, are currently limited, but improving MP quality helps.

18Copyright © 2019 Institute of Scrap Recycling Industries. All Rights Reserved.Source: ”Gearing Up”, SCRAP, July/August 2019

North American Market View: Plastics

• Domestic recyclers increasing quality and/or adding processes to meet

domestic supply and demand (examples)

– GDB International: Pellet production from HDPE, LDPE, LLDPE

– Far West Recycling: Improved PET bale quality (90%→98%)

– CarbonLite: New rPET facilities in TX and PA

19Copyright © 2019 Institute of Scrap Recycling Industries. All Rights Reserved.Source: ”Asia’s Plastic Scrap Shake Up”, SCRAP, May/June 2019

ISRI’s Initiatives and Partnerships

• Trade missions to China, India, and Southeast Asia

• Leadership role in U.S. EPA’s “America Recycles Dialogue” and

America Recycles Week activities (Nov. 11-15, 2019)

• Design for Recycling®

• The REMADE Institute, Founding Member

• “A Better Bin: A Campaign For Strengthening Residential Recycling

Across the U.S.”



Design for Recycling®: Key ISRI Concept

Since ~1990, ISRI’s Design for Recycling®

principles seek to increase sustainability of consumer durables:

• Eliminating or reducing use of hazardous substances and material impediments to the recycling process

• Maximizing use of recycled materials

• Maximizing yield of recyclable materials at end of life

• Working with stakeholders to achieve above goals

Institute of Scrap Iron and Steel. Phoenix Quarterly. 1986, 18(1), 8-10.

Design for Recycling® Award

21

2019 Awardee: Nestlé Waters NA

Pure Life® 100% rPET 700 mL Bottle

The REMADE Institute

• Reduced EMbodied-Energy And Decreased Emissions Institute for Sustainable Materials Manufacturing

– A Manufacturing USA® Institute funded by DOE

– $140M/5-Year Public-Private Partnership in 1:1 Match

• Goal: To drive down the cost of technologies essential to reuse, recycle and remanufacture materials

• 4 Material Types: Metals; Used Electronics; Polymers; and Fibers

• 5 Focus Nodes– Systems Analysis & Integration

– Design for Re-X– Materials Optimization

– Remanufacturing

– Recycling/Recovery

• ISRI has been involved in REMADE and its development since 2013.


REMADE Projects Involving Paper or Plastics

• New Approaches to Improve Deinking Flotation to Increase the Availability of High-Quality, Low-Cost Recycle Paper Fibers - Virginia Tech

• Assessment of the Impact of Single Stream Recycling on Paper Contamination in Recovery Facilities and Paper Mills – University of Miami

• A Dynamic Techno-economic Systems Modeling Framework for U.S. Fiber Recycling - Northwestern U, Yale U, ISRI

• Identifying strategies to maximize benefit of fiber recovery through systems quantification - MIT, AF&PA, WestRock, Graphic Packaging

• Reinforced Recycled Polymer Composites - Oklahoma State University, Niagara Bottling LLC, Shaw Industries

• Scalable High Shear Catalyzed Depolymerization of Multilayer Plastic Packaging – University of Massachusetts-Lowell, Michigan State, Unilever, ACC, National Renewable Energy Laboratory

• Systems Analysis for PET and Olefin Polymers in a Global Circular Economy – Michigan Technological University, American Chemistry Council, Idaho National Laboratory

• Mapping the Material Base for REMADE –Yale University, Unilever, International Zinc Association, Massachusetts Institute of Technology


A Better Bin Poll Results (2018)


Review

• Domestic and global markets have been disrupted in the aftermath of

scrap import restrictions by China.

• Demand exists for high-quality recyclables.

• Domestic investments in processing and quality improvements are

happening in response to supply and demand.

• Market optimism and uncertainties co-exist.

• ISRI is working to improve recycling on multiple fronts.


Thank You!

Acknowledgments

Bernie Lee, Research Analyst, Commodities

Adina Renee Adler, Asst. VP, International Affairs

Joseph Pickard, Chief Economist/Director of Commodities

David L. Wagger, Ph.D.

Chief Scientist / Director of Environmental Management

Institute of Scrap Recycling Industries, Inc.

202-662-8533

[email protected]


26

Recycling Markets: A Look at Trends Amid Global Trade...

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