Resource Recycling Magazine: Keynote offers deep look at global shift in material demand

Keynote offers deep look at global shift in material demand

By Dan Leif, Resource Recycling

September 30, 2015

Noted scrap journalist Adam Minter framed the new world order of recycling survival in unique terms: U.S. recycling programs are engaged in a worldwide battle over bale quality.

"People who are putting things in bins are part of a global market now," Minter said during a 40-minute keynote talk at the 2015 Resource Recycling Conference on Tuesday. "You're all competing together, in a way, to create the best product, something that someone will actually buy."

Minter, who comes from a family of scrap yard owners in Minnesota and now lives in Malaysia, has reported on the global recycling industry for more than a decade, publishing a book on the subject in 2013. He currently contributes to Bloomberg View, as well as Scrap magazine and Recycling International.

His presentation at this week's Resource Recycling Conference in Indianapolis detailed recent developments in the Asian scrap market, particularly China, and laid out the implications for North American MRFs and local programs.

China, he stressed, has transformed over the past five years from a nation hungry for recovered material of any kind to one that is much more discriminating in what it takes. With major infrastructure development projects wrapping up in the Asian giant and higher wages now the norm there, China is far from the buyer it was in 2011 and 2012.

"Don't get me wrong," he said. "There's still demand in China. But the easy stage of development is over. We're not going back to the really good years."

In fact, Minter said he has heard of some instances of scrap metals companies in China actually moving their collected material to buyers in the U.S., a reversal of the material flows the industry has become accustomed to.

How can programs in the U.S. respond to such shifts in the Chinese market? Minter said finding ways to offer higher-quality material should be the priority. As the Chinese manufacturing sector develops in its modern era of higher wages and environmental regulations, Chinese companies are looking to move forward with better products. They can't use dirty feedstock to do that.

"Contamination for the Chinese means, 'We don't want to to buy your crap,'" Minter said. "That's the opportunity for your programs. Be the high-quality source for materials in China."

The economics around scrap exports have been further complicated by the rise in trade between developing countries themselves. Minter showed compelling charts put together by researcher Josh Lepawsky that demonstrated how over the past decade countries across Asia and Africa have begun moving scrap material between themselves, a major departure from the former norms.

That fact adds even more pressure to the quality issue, Minter said.

"If you're competing against recyclers in Malaysia or Indonesia, you want to make the best bale," he said. "Remember that if someone doesn't want that bale you make, it's meaningless."

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