WasteExpo 2016: The law of supply and demand

Domestic demand for recovered paper and postconsumer plastics in the United States has helped pricing and affected exports of these materials, according to speakers in the “Paper & Plastic Recycling Trends and Markets” session at WasteExpo 2016 held June 6-9, 2016, at the Las Vegas Convention Center.

Patty Moore, president of Moore Recycling Associates Inc., Sonoma, California, said postconsumer plastics are sold domestically at a 2-to-1 margin. All high-density polyethylene (HDPE) bottles are reclaimed domestically, with none of this material exported, she said. “You always hear, ‘All that plastic is going to exports,’” Moore said, adding, “No, it’s not.”

She credits consumer product companies’ interest in reducing greenhouse gas emissions by using more recycled content in their products as a factor for the future success of plastic recycling. Additionally, the sector is heading toward a yield-based pricing approach, Moore said. This pricing system, she said, has a lot of potential.

“Plastic recycling will continue to thrive … I have confidence we’ll continue to head in the right direction,” Moore said.

As countries from China to Europe continue to recover as much scrap paper internally as possible, Dan Cotter, vice president of Sweden-based Cellmark Inc., said pricing for this material has remained stable thanks to domestic demand in the U.S. He said every country is consuming more recovered paper domestically. These countries continue to prove self-sufficient by recycling even more of the scrap paper generated internally.

Cotter said, “As bad as pricing is, it’s much better than it would be if it weren’t for strong domestic demand.”

He added, “Domestic demand in the U.S. is certainly balancing out less demand from other countries.”

Supply and demand, Cotter said, “is still the basic law” for recovered paper markets.

Cotter explained how paper usage has dropped, and is a trend that will continue. “The amount of paper being utilized by people across the world, especially in the U.S. and Asia, is dropping and it is a trend that will continue into the future,” Cotter said.

While consumption is down, recovery of scrap paper is up. Cotter cited the most recent U.S. paper recovery rate—66.8 percent —from the American Forest & Paper Association (AF&PA), Washington, as the peak of what can be recovered in this country. At 70 percent, Cotter said Japan is the only country in the world that is recovering 70 percent of its secondary fiber.

There is plenty of old corrugated containers (OCC) in the recovered stream today as more Americans choose to shop online, Cotter said. Packaging grades are the one grade where consumption is actually increasing, he said.

“Some of this online shopping has really saved some of these MRFs (material recovery facilities) and collectors,” Cotter said. “They’re happy to see more online shopping [reflected] in the waste stream.”

For recycled plastics, Moore said film has the “biggest chance for growth,” especially source-separated materials. The challenge there is that there is more generation of plastic film than the capacity to handle the material, she said. Plastic film is a broad category of flexible packaging that includes bags, wraps and pouches. Most of this material is polyethylene.

“A lot of polyethylene (PE) film is generated in the commercial sector and a lot is not being captured,” Moore said. She noted that film gets commingled with other materials, and, “we all know what they do in MRFs,” she said.

Developing reclamation capacity for PE film is necessary, Moore said. She described how a number of industries, including automotive, could manufacture products made from recycled film if these sectors were aware of the material’s capabilities. “We need markets to be more robust,” Moore said.

As was the message in many programming sessions at WasteExpo 2016, Moore said consistent terminology across the industry is crucial. She said in some regions, several communities send recyclables to the same MRF, however, different communities are exposed to different messaging. With such a mix of terminology, residents are confused, Moore said.

“We need to use consistent terminology between ourselves and outreach so we can unconfuse the public,” Moore said.

She suggested mixing up the messaging to get the point across. Moore described a case study in Vancouver, Washington, where residents saw two signs: One stating that PE film does not belong in recycling bins and another asking them to take film to the store or retailer where the material is collected. Through that study, the MRF saw a 70 percent reduction in film entering its facility while the retailer saw a 120 percent increase in film in its stream.

Moore said, “I highly recommend mixing those two messages together.”

WasteExpo 2016 was June 6-9, 2016, at the Las Vegas Convention Center.