If you were thinking about getting into the recycling business, now is not a good time.
North Bay refuse companies say recent restrictions imposed by a primary buyer of recycables, China, on the types and quality of plastic and paper it will purchase is taking a bite out of their bottom lines.
China’s National Sword policy, announced in January of last year, declared it would no longer accept mixed paper recycling, which can be anything from newspaper to office paper, as well as certain plastics due to contamination.
In the fallout of the refusal, some companies say they plan to raise rates on customers and have even sent recyclable material to landfills because it is less expensive.
Marin Sanitary Service collects, sorts and resells recyclable cardboard, glass and plastics from commercial business, mutlifamily dwellings and single-family residences in central Marin.
“For mixed paper in 2017, we were getting on average $125 a bale,” said Kim Scheibly of Marin Sanitary. “At the end of 2018, we were getting $28 a bale.”
She said those estimates come from markets, mostly in Asia, where her company can continue to sell mixed paper.
Recology handles recycled materials from locations including across Sonoma and Marin counties. Its Santa Rosa recycling facility receives around 300 tons daily. Prior to the changes in Chinese policy, Recology sold mixed paper mainly to China for between $135 to $140 per ton, a number that currently sits at about $17 to $20 per ton, said Celia Furber, department manager for Recology Sonoma Marin’s Waste Zero Department. It's the company’s education and outreach arm, responsible for meeting and exceeding waste-diversion goals.
Also, China has also insisted material have 1% or less contamination, which Furber said is unrealistic.
“It’s forced the whole world to look at their recycling programs and really reeducate their customers about making sure they put clean material in the recycling bin,” she said.
A large range of plastics have also been impacted, Furber said. Plastic comes in a variety of grades and for plastic 3-7, which can include squeezable condiments bottles, plastic bags and other materials, the Chinese market for that material has dried up. This forces recyclers like Recology to seek other markets, mostly in Asia.
Whereas those plastic grades sold for between $100 to $140 a ton historically, Furber said those rates have plummeted to $10 to $60 per ton.
The drops and fluctuations in price are largely due to too much supply and not enough demand.
“Everybody is dog eat dog trying to get their material into what they consider a new place,” now that China is no longer an option, said Janet Hanks, a waste broker who works with Marin Sanitary. She noted Europe, Australia Japan and elsewhere are dealing with the same problem as the U.S., also causing prices to drop.
The solution for companies is not as simple as finding new markets for the affected materials. Hanks said U.S. paper mills which could handle the excess mixed paper have mostly shuttered in recent decades because of Chinese competition and other issues like bad odors and excessive water use. Buyers send recycled material to paper mills which break it down into a pulp, cleaning and bleaching it to be made into new paper.
Looking abroad, Hanks said “even if the mill capacity was there, the port capacity isn’t there in a lot of these countries.” She added “There are no other countries even if you combine the rest of Southeast Asia that can take as much material as China.”
Recology’s recycling prices
The company’s prices before and after National Sword. National Sword is a policy in China that has banned the importation of certain types of solid waste, as well as set strict contamination limits on recyclable materials.
Mixed paper: $17-$20/ton ($135-$140/ton*)
Cardboard (mixed): $70-$80/ton ($190-$200/ton*)
Mixed plastics #3-7: $10-$60/ton, $60/ton in May 2019 ($100-$140/ton*)
Staying local: Recology’s glass and metal resale
Glass: Sold to Strategic Materials in Fairfield
Aluminum: Sold to Anheuser Busch in Fairfield
Tin: Sold to Alco Iron & Metal in Vallejo