The Markets Victor Horton Executive Director, MRRA May 3, 2016

The late 80’s and early 90’s Towns were closing their unlined landfills and getting started with recycling MRRA marketed its first load in Sept 92 for Coastal Recycling OCC was paying $15 for most of Maine mills dealt with recycled fiber Just being able to move material brought towns great joy.

The Markets – Cardboard In Dec 94 prices rocketed up to $100, Mills were adding new capacity and China was hungry for loads. In April 95 the price topped out at $215, but within 6 months, their appetite satisfied in Oct 95 it plummeted back to $15. It took almost 2 years to reach $100 again in Aug 97. There were several stretches where $100 was rare. For the next 7 years OCC hit $100 only 8 more times In Mar 07, OCC had a stretch of over $100 which lasted a year and a half.

The Markets – Cardboard Then in Sept 2008 it fell quickly and leveled off at $25 per ton. It did not reach $100 for 15 months until Jan Interestingly enough: From Jan 2010 until Aug 2014 OCC only dropped below $100, twice. From Aug 2014 to today the price has remained fairly steady never going below $80 or above $95. In fact for the past 5 months OCC has officially been at $85/ton.

The Markets – Cardboard

Current Market Condition - OCC Many of the Mills serving New England are needing extra tons, trying to build inventory and fill orders. Kruger will be starting up a mill soon that will need close to 400,000 tons. That could affect our market once it is fully operational. Export will affect our pricing but as of yet we have not seen any sizable increase in pricing. One buyer was very surprised when the April 2016 price did not change.

The Markets I wanted to share some of the notes from a conference I attended in Indianapolis last September. Jerry Powell’s organization graciously allowed me to attend on scholarship. Adam Minter, an American writer based in Malaysia with ties to the Bloomberg View told us that we are part of a globalized recycling world.

The Markets Being part of that market, we need to educate the public to make the best product if we are to compete.

The Markets China was exporting PET as of last Sept and they were exporting it. The price is still depressed. Low oil prices don’t help the price either. China’s Green Fence with regards to quality was actually in effect two years before they started enforcing it. It was at this time loads were getting rejected and stranded at the port. Restrictions have relaxed, but they are still strict on contamination in China.

The Markets Pill bottles are considered biomedical scrap so they have to be sent into Hong Kong for processing and then on to the mainland. Agricultural pipe with mud and dirt is also not allowed. China now produces about 39% of their paper domestically. Wages are on the rise and people don’t want work at the dirty jobs any more.

The Markets Parts of this may be dated, but Bill Moore of Moore & Associates, an international consulting firm providing market research, told us that the US dollar was strong and Asian economies slow. China has an overcapacity to make paper. Their currency is devalued but their appetite drives world pricing. Newsprint demand going down while demand for other deink grades is up.

The Markets Mixed waste processing might be the next big thing. He said the green fence was a wake up call for us. In years China might not need US recyclables and we could be looking to India or Vietnam as the next growth areas. The costs of processing films at the town recycling center or collecting it curbside are very high. Pricing right now is in the /lb range with export as an option but the freight to the port leaves little for the town.

The Markets We recommend taking it back to the supermarket and retail stores. Many people don’t realize all of the types of film accepted in the program and which stores take it. A list can be found at: ww.recycleyourplastics.org ww.recycleyourplastics.org Contamination revisited Reported from Keep America Beautiful regarding what we put in the recycling. The motto used to be put it all in, now it is moving toward when in doubt leave it out. Some single sort programs around the country are leaning toward keeping glass out or collecting is separately.

The Markets Thoughts from Waste Management in Indy. They have 118 MRF’s, 3 less than the year before. 46 ss, 64 sorted, and 8 C&D They lament the current supply and Demand imbalance. Their MRF’s cost on average $125/ton to process single stream. Ratios 60% paper, glass 18%, 16% residue and over 30% of what they process has a negative sale value.

The Markets - Newspaper Newspaper pricing has been pretty steady over the past several years although it has followed the same Basic path as cardboard. Papers are smaller and there are not a lot of mills around to take it. Prices have been pretty much ho hum for going on about 4.5 years. Demand can only suffer as people reading the paper on line increases and telephone directory use dwindles.

The Markets – Mixed Paper Mixed Paper has a storied past. Back in 1997 it was selling for negative $12/ton while OCC was at $50/ton. A $62/ton difference Today’s spread is about $40/ton difference. It did hit $130 in 2011, but we are lucky to get $25 to $35 now. Mixed paper moves off and on depending on local demand, but export seems to always be a backup plan for it.

The Markets - #2 Plastics Natural HDPE, Milk Jugs went over $1,100/ton last year and down to $550 early in 2016, recently one major buyer offered about $740/ton which forces the smaller buyers to follow suit to a degree. Color has also been on the rise. Virgin material starts looking better when the prices get too high.

The Markets – All other Plastics Rigid Plastics were paying over $100/ton, but lately we are seeing $60 or so per ton. Same for plastics #3-7 which was as high as $60 but now about $20-30/ton Clear bags of LDPE and shrink wrap can bring in $380 at the port of Boston for a full load, but the grocery bags are best returned to the retail stores for recycling.

The Markets – Steel Cans Cans are a fun commodity to watch. May 1994 saw $68/ton with a few ups and downs but not much to speak of until $0/ton by Christmas By March 2002 we were getting a festive $8/ton. We then had a happy Thanksgiving $208/ton, 3 months later it was $103/ton. Then a bump in the road sent us to $20/ton in June 2005.

The Markets – Steel Cans Back up the next year to a happy Fourth of July 2006 and $119/ton, we bounced around in 2007 in the $100’s/ton and an end of the year at $114/ton. By the next June prices were soaring at $295 and a month later $380/ton. No more than one year to the day we were getting $25/ton. July 2009.

The Markets – Steel Cans warning recycled slide ahead The next year by Dec 2010 we topped out at $245/ton. A little boost the next may put us at $290/ton. By the end of 2012 we were back to $195/ton. The next two years 13’ and 14’ paying in the $ range. Not until early 2015 did it start tanking. By Oct 2015 we were back to $10/ton with today being a whopping $75/ton or thereabouts.

The Markets – Steel Cans As late as last October, China had been dumping metal on the US market and demand in the petroleum sector was low. Alaska has reported oil wealth revenues are down and they are facing a 3.5 billion deficit. The new governor is even thinking about a first ever income tax.

The Markets – Single Stream Single stream started in Maine around 2007 when ecomaine converted from dual stream. Casella opened a plant in Lewiston late last year. Fiberight also plans to add single sort to their Hampden facility in the next few years. Early on contracts were available with profit share. When commodity prices were good we did see a high of $25/ton. Also saw a low of negative $55/ton. Current prices range from negative $30-50/ton. Prices are usually quoted delivered to the facility

The Markets – What does the future hold? MRRA has tracked commodity pricing since 1994 and is willing to share. The quality of the material will dictate your pricing Commodity pricing is based on many factors and economic patterns. Sometimes forecasting the weather seems easier.