Philip Zigby Markets Update May 2013

The good, the bad, and the ugly

THE GOOD OCC remains strong. Market is in balance from a supply and demand point Fluctuations in pricing will be minimal THE BAD ONP #8 pricing is slipping MRFs are slowing down the lines and adding staff to make grade Cost of future processing contracts may increase THE UGLY Mixed fibre grade is slowly disappearing Inspections results Chinese ports are ranging from delays to rejections carrying tens of thousands of dollars in fees

THE GOOD The debate on thermoform clamshells seems to have subsided. Virtually all processors are accepting them in their feedstock THE BAD Pricing continues to fall as China is slow to come back into the PET market THE UGLY More and more PET containers are being sold with a plastic sleeve making it difficult for optical sorters to identify materials. Increases costs at the MRF and down streams

THE GOOD Demand remains constant and supply is low, pricing remains positive THE BAD AND THE UGLY…. They can take a break on this one.

THE GOOD Ontario has a strong established presence for the processing of mixed plastics No municipality should be void of an option to divert mixed plastics THE BAD With China currently not buying #3-#7, US supply is looking to market into the Ontario processors, now more than ever it is important to cultivate long term relationships with processors. THE UGLY Some MRFs have been “Cherry Picking” the higher value polyolefin from the stream, puts into jeopardy the mixed rigid program Tubs and lids pricing still around $200mt however lower costs for virgin material may result in lower pricing

THE GOOD No shortage of buyers for metals, everyone loves metal THE BAD Pricing continues to soften, steel price down again for May and June THE UGLY Markets for prime grade aluminum are very restrictive and quality standards are being adhered Downgrades and rejections have become common

THE GOOD Contrary to popular belief there is a home for glass in Ontario, clear, coloured and mixed broken glass. THE BAD The quality of MBG in Ontario has deteriorated and is causing stress on the market processors THE UGLY The cost to MRFs to improve glass clean up systems is not insignificant. Will this have an impact on Blue Box best practices and funding? Is there CIF funding available

THE GOOD…. AS IT GETS EPS has some homes, it will continue to be an expensive commodity to handle THE BAD AND UGLY With China out on film, MRF grade film is on the verge of being crippled as a commodity Hope may be on the horizon with facilities such as the EFS plant in Listowel handling this film grade.

NEW MRFS BUILT AND OPERATIONAL Canada Fibers in Toronto, Waste Management in Cambridge If you can get in, go and see them. Processing the largest volumes in Ontario