Many recyclers will be happy to say goodbye to 2019. It was a challenging year for recyclers, regardless of the secondary commodities they process. While other factors have contributed to this situation, China’s import restrictions and its trade war with the U.S. have had profound effects on all sectors of the recycling industry.
In our editorial staff’s conversations with industry sources, few seem to think markets for secondary commodities will change appreciably, at least in the first half of the year. Their outlooks for the second half of 2020 and for 2021 are a bit brighter.
As we note in the Paper department of our Commodities section, in its fourth-quarter earnings call, Atlanta-based WestRock predicted old corrugated containers (OCC) prices won’t start to increase much, if at all, until the second half of 2020.
However, one broker based in the West tells Recycling Today he sees several reasons to be optimistic about OCC heading into 2020, including the “enormous amount” of new containerboard capacity coming online in the U.S., Mexico and Asia in the next few years.
“In our editorial staff’s conversations with industry sources, few seem to think markets for secondary commodities will change appreciably, at least in the first half of the year.”
In the nonferrous metals sector, recyclers have less to look forward to than those in the paper sector in terms of additional domestic capacity in the year ahead, but capacity additions are planned. For example, the former Colonial Metals’ scrap-consuming brass and bronze ingot production plant in Pennsylvania, which closed in 2018, was purchased by California Metal-X (CMX), a Los Angeles-based copper and bronze ingot maker that plans to restart operations.
In the aluminum sector, JW Aluminum, which produces a variety of flat-rolled aluminum products, is expanding its Goose Creek, South Carolina, plant. The first phase of the expansion is due to come online next summer.
Matalco, headquartered in Brampton, Ontario, also started construction on its new $80 million aluminum recycling facility in Wisconsin Rapids, Wisconsin, this year. The facility will produce more than 115,000 tons of aluminum billet annually from scrap.
In the ferrous scrap sector, Charlotte, North Carolina-based Nucor will build a scrap-fed electric arc furnace steel plate mill in Brandenburg, Kentucky, that it expects to be fully operational in 2022, pending regulatory approvals and obtaining the appropriate permits.
New capacity also is coming online starting in 2020 to consume plastic film and mixed plastics.
For recyclers who are struggling currently, these capacity additions may seem far off. But with planning and discipline, recyclers may find new opportunities nearer than they thought.