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Highlights from Day Two of the Paper & Plastics Recycling Conference

Day two of the conference featured a number of education sessions focused on the impact of China’s import ban and improving recycling.

Day two of the Paper & Plastics Recycling Conference, hosted by Recycling Today this week in Chicago, brought attendees together for another round of education and keynote sessions focused on the impact of China’s import ban, improving recycling, the impact of artificial intelligence on processing and quality, material trends in packaging and more.

Here are some highlights from two key education sessions that took place on day two. Read takeaways from day one here.

Alternative Markets for Mixed Paper

Kicking off day two of the conference, Bill Moore of Moore & Associates, Susan Robinson of Waste Management and Steve Miller of Bulk Handling Systems (BHS) discussed why North America became so dependent on China as the primary market for recycled mixed paper and the nation’s current alternative market options, such as other Asian countries.

Moore shared that even before China’s ban on the imports of mixed paper, the material grade bordered on chronic oversupply. And now, with the country backing out of the mixed paper market, it has collapsed. In fact, year-to-date through July 2018, mixed paper demand is down 11 percent.

“The current average price in the U.S. is $0 per ton in many markets,” stated Moore. “And while it won’t always be at no cost, the mixed paper market is many years from being robust.”

He went on to explain what’s happening with mixed paper:

  • China’s imports are zero.
  • There’s an increase in exports to India, Vietnam, the Philippines, Indonesia and Thailand, but Vietnam and Thailand have responded by putting their own restrictions in place.
  • There’s more capacity to be built in Southeast Asia to consume U.S. mixed paper.
  • The U.S. domestic consumption market is starting to have activity. For example, more use at existing board mills and producing pulp.

He also discussed some of the new North American mill projects for the consumption of mixed paper, such as Pratt Industries’ new mill in Ohio and Green Bay Packaging’s upgraded mill in Wisconsin.

Robinson touched on how Waste Management is affected by the changes in the recycling industry, sharing that in 2017, 27 percent of the company’s fiber went to China. And this year, less than 3 percent is going to China.

She also explained the impact that China’s import ban has on materials recovery facilities (MRFs):

  • MRFs are adding equipment and labor, while slowing down their processing.
  • The changing waste stream will continue to stress MRFs.
  • The average commodity pricing is 50 percent lower than a year ago.
  • Consumers expect “free” recycling and whatever they put into their carts to be recycled.
  • There is little understanding to technical and economic limits to recycling.
  • Recyclables do not create an economic or environmental benefit until they are sold as commodities and manufactured into products.

Wrapping up her presentation, she presented both good and bad news for the future of recycling:

Bad News

  • Recycling is likely to get harder before it gets better.
  • The cost of recycling is increasing, and commodity value is likely to remain low due to oversupply.
  • Packaging continues to become more complex, making recycling confusing and leading to an increase in contamination.
  • Quality requirements are likely to stay high.

Good News

  • Markets for paper will improve.
  • Efforts to grow domestic demand are increasing.
  • We have more knowledge to refine more effective and efficient programs.

Miller shared some helpful tips for improving the quality of mixed paper, including removing contamination, adding equipment and new technologies and creating marketable products from mixed paper.

“The first step is to capture the cardboard. Why? Because it helps you save on labor and capture value,” he stated. “Secondly, use technology to remove contaminants like plastic bags.”

Miller also highlighted what the future as in store for recycling, sharing that the recycling industry is clearly undergoing a transition, but it’s not the first transition within the industry, and it certainly won’t be the last. He went on to say help is on the way, but it will take time to get here; improvements in profitability can be made by understanding what’s in the stream; the ironic outcome will likely be a more robust domestic consumption of fiber grades; and all roads lead to the basic premise that all players in the industry must produce better quality in order to remain relevant.

Alternate Markets to China

With China closing its doors to various imports, areas like India, Vietnam, Thailand and Indonesia have been receiving an uptick in materials. But will they become “the new China,” or mirror the country’s actions? This was the topic of discussion during one of the afternoon sessions at the conference.

The session, “Alternate Markets to China—India, Indonesia, Vietnam, Mexico, Latin America,” featured speakers David Lee of Pacific Genesis, Steve Sutta of Sutta Company, Rogelio Silva of Continental Paper Grading and Sung Soo Lee of Hansol Paper and included a lively dialogue between attendees and speakers about the markets for plastics and paper.

Sutta kicked off the session with a bold statement, saying, “There is no market for mixed plastics, and there won’t be a market for mixed plastics. The market is not coming back.”

He went on to say that no one want’s to be the world’s dumping ground, and that the industry needs to find new ways to use what’s being put in the waste stream.

Commenting on the paper market, Silva said, “When it comes to paper, the industry needs to rethink itself and get creative like it did when sorting, magnets and conveyors were first introduced to the industry.”

He also said that, currently, there are no alternative markets south of the border (Latin America, Mexico, etc.) that he knows of.

Responding to that comment, Lee explained that material needs to go somewhere with high labor, low wages, a lot of water and easy transportation. But identifying those places is challenging because it used to be “if we bale it, they will take it,” but that’s not the case anymore.

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