There is no doubt that 2018 has been a challenging year for recycling companies, as Asian markets, new policies, and burdensome tariffs have created a lasting uncertainty in the industry. North America has struggled throughout this time and the shift has forced us to begin considering other solutions to protect recycling’s future. While we try to figure out next steps and what to expect from the fluctuating markets, Berg Mill reports on the tolls the tariffs have taken on recycling.
Rising Costs and Limited Resources
One of the issues from the recycling shift is high equipment costs and material prices that have seen significant increases in the past year. Some materials being targeted directly, like scrap paper and plastic, could also see changes with proposals in place for more tariffs. One of the issues with the shift is the unpredictable nature of the market right now.
This complex situation is changing every day and it is difficult to describe. For some though, this isn’t the case. Cook Paper Recycling Corporation’s Joe Jurden explains the impact his company is experiencing. Resource Recycling quotes Jurden saying, “Something everyone in the recycling industry is feeling right now is the effect on baling wire…most budgets don’t have that kind of leeway. And it’s not over.” When the U.S. placed tariffs on steel and aluminum, China responded with its own set of tariffs. The responses to the shift have seemingly created more challenges for companies already struggling to find the proper footing.
Though there have been some good and bad changes, there have been more challenges to overcome than achievements to celebrate. The price of scrap metal escalated to increase revenue opportunities, but the tariffs on steel containers have made prices rise and availability scarce.
Equipment Manufacturers Making Modifications
Equipment manufacturers have also experienced the impacts through rising costs and have been forced to play the waiting game with the rest of the industry. Resource Recycling states this will “…mean higher prices for those operators who make machinery purchases in the coming months and years.”
Director of sales and marketing Ashley Davis of CP Group revealed manufacturers are already in a high-overhead position and these new costs cannot be taken on. Orders are being pushed back, prices are on the rise, and the crushing tariffs have hurt most manufacturers. CP Group noted their steel order took about three weeks to receive when it would have normally taken a few days. The tariffs and price hikes have created financial obstacles for manufacturers and other companies.
Assessing the Unknown
Another tough challenge in the market right now is predicting the finances and availability of resources. There is uncertainty with the Trump Administration’s next moves as well as China and other countries responses to the U.S.’s decisions. Stakeholders are scrambling to find answers to meet their goals due to price increases and tariffs creating larger financial burdens. Resource Recycling offers the details on the tariffs. These increases may only last short term, but the industry is in desperate need of solutions to address long-term concerns, materials, and the economy.
At Berg Mill, we will continue to work hard to overcome fluctuating commodity markets, opening markets in other countries, forging strategic alliances, and improving domestic processing capabilities. We would like to help you move off any paper (now including #52 milk carton scrap), plastic, metal, and textile scrap. Berg Mill has the expertise and know-how to navigate through these troubled waters.
Berg Mill has a long history as one of the pioneers in the industry, and we are not going anywhere even when faced with these challenges. Every day we are making progress, as new homes start to become more and more real for your material whether it be paper, plastic, metal, textiles, etc. If you continue to handle large amounts of recycled waste and are looking for solutions to offload idle scrap, please contact our industry veterans at Berg Mill Supply.