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Bad News For Recycling Or Just A Market Adjustment?
Yangzhou Chengsen Plastics Co.,Ltd | Updated: Jun 02, 2018

The North American plastics recycling sector is in a state of turmoil, which should come as no surprise because of the impact of China's National Sword policy on the global market.

This week's ranking is proof that there are winners and losers among plastics recyclers. This year's listing of 195 companies is about 7 percent smaller than last year's, which had 209. Companies don't typically announce that they're going out of business, so getting all the details is tough. But Hollee Keller, our editorial research coordinator, is persistent and doesn't drop companies without a good reason.

So it's clear to us that, even in this era of a booming North American plastics sector and with growing consumer interest in sustainability, a notable number of recyclers are going out of business.

But is this really bad news, or is it just a market adjustment?

According to Keller's research, the volume of recycled material handled by the companies in our ranking was steady compared to last year, about 13.4 billion pounds. There are fewer companies, but their average volume is up about 5 percent compared to the numbers in our 2015 report.

Keller believes what's happening is a significant number of companies that focused on brokering have gone out of business but that companies reprocess material in-house are growing. That also jibes with government data, which shows that less scrap plastic is being exported to China. So where is all the recycled plastic going?

Keller added a question to this year's survey: "What impact is National Sword having on your business?" Thirty-six firms responded. Keller, in her recent "All Things Data" blog, wrote that she received a wide variety of comments, depending on each firm's business model. Some are struggling; others are shining. Here's a sample of the recyclers' comments:

• National Sword has killed my business.

• We had lower volume, but, [we] invested in equipment to reprocess material we previously exported. Overall National Sword should help our business greatly.

• The National Sword program has not impacted us too much, but it's a wake-up call to all U.S. recyclers to start cleaning their material better, and incorporate quality control systems. This will require a capital outlay for sorting machines and wash lines, to name a few. This will separate the men from the boys as far as who wants to take on the additional capital requirements to clean their ongoing plastic streams.

• National Sword has motivated us to explore and open up new global and American markets. Our sales and pounds shipped overall, since National Sword, have increased company wide.

• National Sword has actually helped us. We are actually getting less trash and have found new domestic buyers for most of the material previously sent overseas at better prices.

• Most of [our] customers closed shop and relocated to South Asia. Some closed shop for good. Looking for new customers. More domestic and less export.

• National Sword has created opportunities as well as difficulties. We are not a large-volume exporter, so pain has been minimal. Teaming up with domestic innovators has shown significant promise.

Obviously we did not hear much from the companies that went out of business. But I think there is some encouraging news in the ranking. Sure, there is some short-term pain. But National Sword may end up being good for North American plastics recyclers.

Yangzhou Chengsen Plastics Co.,Ltd
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