Recycling Market Update Rob Taylor, November 1, 2017

Recycling Market Update Until recently recyclable commodity trends have been favorable for public recycling programs Series of Chinese initiatives have introduced uncertainty and are already impacting recycling markets, particularly paper (“National Sword”) Public programs and MRFs likely to experience market-related stress Hindsight allows market to understand what was happening with OCC

What is National Sword? A series of Chinese government actions impacting the import of recyclable materials into China Includes ban on importation of post-consumer plastics and unsorted paper beginning Jan. 2018 Intense scrutiny on bale quality for imported materials (0.3% contamination limits) What’s behind National Sword initiative? Concern about Chinese environment, seeking to end import of trash Coupled with growth of Chinese middle class, China pivot towards looking towards their own waste stream for recyclables

Fiber / Paper Prices (per ton) Last 5 Years

Fiber / Paper Prices (per ton) Last 5 Years

Fiber / Paper Prices (per ton) Last 5 Years

Aluminum, PET and HDPE Prices (per .lb) Last 5 Years

Gross Value of a Commingled Ton Over Time

Gross Value of a Commingled Ton Over Time National Sword Impact On Paper Values

Gross Value of a Commingled Ton Over Time

Gross Value of a Commingled Ton Over Time ?

Markets On the Near Horizon “National Sword” will continue to impact pricing for recyclable commodities, especially those materials most dependent on export markets, e.g. 3-7 plastics Rigid plastics Low grade plastic film Mixed paper Recycling industry waiting to see what will happen over next 6 months Important considerations: Chinese industry still needs feedstock How will North American demand respond?

Public Program Tips for Uncertain Times Stay calm, don’t over react No hasty decisions about accepted materials Focus on things you can control (more in a minute) Avoid public program dependency on revenue from materials sales If possible, use earnings during good times to create a reserve account / rainy day fund

More Tips Establish and maintain communication and positive relationship with your processor / MRF Support domestic demand for recyclables through post- consumer content requirements for public purchasing Think long-term (market blips aren’t new) Focus on program efficiency to control operating costs Understand that periods of low value can exacerbate challenges with glass

What’s a Program to Do? Focus on materials quality and reducing contamination Top messages for the public: No plastic bags, no bagged recyclables!! No trash, no tanglers!!

Tools from The Recycling Partnership https://tools.recyclingpartnership.org/contamination/

Rob Taylor NC DEACS rob.taylor@ncdenr.gov 919-707-8139 Thank You! Rob Taylor NC DEACS rob.taylor@ncdenr.gov 919-707-8139