08-05-2018, 01:59 AM
Ah! It's probably not the tariffs. It's China's ban on taking US waste/recycling.
https://www.wsj.com/articles/u-s-recycli...1533231057
U.S. Recycling Companies Face Upheaval from China Scrap Ban
Top waste-services companies say their recycling operations are a drag on earnings as business with their biggest foreign market disappears
The top two solid waste services companies in the U.S., Waste Management Inc. and Republic Services Inc., both recently pulled back profit projections in their recycling divisions based on China’s new policies, which have created a glut in scrap markets and sent global prices for scrap material plummeting.
“At this point in time, we have zero volume going to China,” said Richard Coupland, vice president of municipal sales at Republic Services. “We are still able to move material, but our economic model is completely upside down.” ...
Republic Services processes about 6 million tons of paper, glass, plastics and other materials for recycling each year under contracts with roughly 2,400 municipalities in 40 U.S. states and Puerto Rico. Before this year, about 40% of that was shipped to scrap buyers in China who would break it down and make new boxes, packaging, toys and other goods.
It was cheap for recycling collectors to send scrap to China because ocean carriers offered deeply discounted prices to get shipping containers back to Asia after they had arrived at U.S. ports packed with goods made in Chinese factories. “We were happy to send material back in them for pennies on the dollar,” Mr. Coupland said.
Now it’s gotten more complicated. Mr. Coupland said Republic Services has found new buyers in Malaysia, India and other markets, but fewer ships make direct trips there from the U.S., driving up transportation costs. Global prices for used materials have plummeted, so Republic loses money on most of the recycled scrap it now sells overseas.
That cost is increasingly likely to get passed along to U.S. households and businesses.
https://www.wsj.com/articles/u-s-recycli...1533231057
U.S. Recycling Companies Face Upheaval from China Scrap Ban
Top waste-services companies say their recycling operations are a drag on earnings as business with their biggest foreign market disappears
The top two solid waste services companies in the U.S., Waste Management Inc. and Republic Services Inc., both recently pulled back profit projections in their recycling divisions based on China’s new policies, which have created a glut in scrap markets and sent global prices for scrap material plummeting.
“At this point in time, we have zero volume going to China,” said Richard Coupland, vice president of municipal sales at Republic Services. “We are still able to move material, but our economic model is completely upside down.” ...
Republic Services processes about 6 million tons of paper, glass, plastics and other materials for recycling each year under contracts with roughly 2,400 municipalities in 40 U.S. states and Puerto Rico. Before this year, about 40% of that was shipped to scrap buyers in China who would break it down and make new boxes, packaging, toys and other goods.
It was cheap for recycling collectors to send scrap to China because ocean carriers offered deeply discounted prices to get shipping containers back to Asia after they had arrived at U.S. ports packed with goods made in Chinese factories. “We were happy to send material back in them for pennies on the dollar,” Mr. Coupland said.
Now it’s gotten more complicated. Mr. Coupland said Republic Services has found new buyers in Malaysia, India and other markets, but fewer ships make direct trips there from the U.S., driving up transportation costs. Global prices for used materials have plummeted, so Republic loses money on most of the recycled scrap it now sells overseas.
That cost is increasingly likely to get passed along to U.S. households and businesses.