China's Ban On Waste Has Caused Global Scrap Prices To Plummet

- Aug 10, 2018-

The large-scale US waste disposal enterprises that rely on China's export of waste products for many years are suffering from difficulties due to the introduction of China's garbage import ban. These companies say that the disappearance of China's largest foreign market business has dragged down their profits.

The Wall Street Journal reported on the 2nd that in response, these companies are considering raising prices and adjusting their business accordingly. US companies have been exporting waste products to China for 10 years, and China has introduced new policies overnight, which has subverted The entire industry.

According to the Wall Street Journal, China's garbage import ban has led to a surplus in the scrap market, causing global plunge prices to plummet. The top two solid waste disposal companies in the United States - the US Waste Management Company and the Republic Service Company - have recently lowered their profit forecasts for the recycling department according to China's new policy.

Richard Coupland, vice president of the Republic Service Company, which is responsible for municipal sales, said: “At present, our sales to China are zero.” “We can still deliver some scrap, but our economic model is completely reversed. ."

According to a US Waste Recycling Association, 31% of the US exports of waste last year were sold to China, with a total value of $5.6 billion.

According to contracts with 2,400 cities in 40 states and Puerto Rico, the Republic Service Company processes approximately 6 million tons of paper, glass, plastic and other materials that can be recycled annually. Before this year, about 40% of them were shipped to Chinese scrap buyers, who would break down the purchased scrap and produce new boxes, packaging materials, toys and other goods.

According to the Wall Street Journal, the cost of shipping waste products to China by US waste recycling companies is very low. Because shipping companies also ship containers back to US ports after they arrive at US ports, they often offer very favorable deals. the price of.

“We are very happy to ship the waste at very cheap prices,” Coupland said. But now the situation has become complicated.

Because of the disappearance of Chinese buyers, Copeland said that the Republic Service Company has found new buyers in Malaysia, India and other markets, but few ships go there, which pushes up the entire transportation cost. Coupled with the global decline in the price of second-hand materials, the Republic’s service companies are currently losing money to export waste products overseas.

The Wall Street Journal said that the cost of waste recycling companies is increasingly likely to be passed on to American homes and businesses. In the eyes of some towns, this would make their cost of receiving recycling services too high.

“The recycling industry as a whole will face challenges unless these cities start to envision a better, more sustainable business model,” Cooper said. This means that scrap recycling companies will have higher contract prices with cities, as Coupland said. It may cause the average household's average spending on recycling services to double, reaching around $7 a month.

According to the Wall Street Journal, many people in the waste recycling industry said that improving the recycling of waste can help customers keep costs low. China's import ban has raised the threshold for pollutant imports, and US recycling companies will have to upgrade equipment and hire more workers to meet more stringent standards.

Copland said that in major waste recycling markets such as Dallas, Philadelphia and Phoenix, 30% to 50% of the materials in the bins may be contaminated or unrecyclable. “Therefore, these customers not only have to pay for the waste to be sent to the treatment plant, but also pay for the waste sorting.”