Recyclable Material Wholesalers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 6,260 recyclable material wholesalers in the US distribute metal scrap, glass scrap, paper scrap, plastic scrap, and other recyclable materials for reuse in manufacturing, construction, and other applications. The industry includes auto wreckers who dismantle motor vehicles to resell scrap materials, rather than selling used auto parts.

Dependence On Economy

Demand for recyclable materials is dependent on economic conditions, particularly the strength of the manufacturing and construction sectors.

Volatile Scrap Prices

Prices for recycled materials can vary widely from year to year, affecting revenues and inventory valuations for wholesalers.

Industry size & Structure

The average recyclable material wholesaler has a single location, employs about 15-16 employees and generates $11-12 million in annual revenue.

    • The industry consists of about 6,260 companies that employ 100,000 workers and generate $78 billion in annual revenue.
    • The industry consists primarily of small family-owned businesses.
    • The industry is fragmented, as the top 50 companies account for only 47% of industry revenue.
    • Large companies include America Chung Nam (paper and plastic recycling), David J. Joseph Company (scrap metal and a subsidiary of Nucor Corp.), OmniSource (scrap metal and a subsidiary of Steel Dynamics, Inc.), Sims Metal Management (scrap metal and U.S. subsidiary of Sims Group Ltd. of Australia) and Radius Recycling (formerly Schnitzer Steel Industries).
    • Some firms act as brokers, selling recycled materials for owners of material recovery facilities (MRFs), while others operate their own MRFs.
    • Some large companies are vertically integrated and also process scrap material into finished products.
    • The industry also competes with the recycling operations of large waste management companies, such as Waste Management, Inc. and Republic Services, Inc.
                                Industry Forecast
                                Recyclable Material Wholesalers Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                May 13, 2024 - Steady but Flat Industry Growth
                                • The recyclable material wholesale industry is expected to post steady but flat sales growth after a slowdown in 2024. The industry’s year-over-year sales growth is expected to slow to 1.7% in 2024 after a gain of 6% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to rise to 3% in 2025, then notch average annual growth of about 3.4% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                • US exports of recycled paper declined significantly in the first quarter of 2024 compared to the same period in 2023, and recycled plastics exports were flat, according to Recourse Recycling analysis of Census Bureau trade data. US fiber exports declined 17% in Q1 2024, marking the lowest volume of first-quarter fiber exports since 2002. In Q1, Thailand was the largest fiber export market but its purchases of US recycled fiber were down 27% year-over-year. A 62% increase in Q1 US recycled fiber exports to Malaysia was insufficient to offset a 25% decline in India and a 14% drop in Mexico. The US exported nearly 235 million pounds of scrap plastics in the first quarter, virtually unchanged from a year earlier. About 34% of first-quarter recycled plastics exports went to Canada, and 22% went to Mexico.
                                • Many of the largest waste-hauling firms saw their recycling-related first-quarter revenues improve amid higher commodity prices for several types of recyclable materials. Republic Services’ recycling revenue rose 35%in Q1 2024 compared to the same period in 2023, and Waste Connections’ recycling segment saw an increase of 56.6%. Waste Management’s recycling operations’ revenues grew by more than 16%.
                                • The consolidation trend in the North American solid waste and recycling industry continued in 2023, but the value of deals dropped compared to 2022, according to Waste Dive. Five of the largest publicly traded firms in the US and Canada notched a combined $4.2 billion in acquisitions in 2023. That was down from an estimated $6.3 billion in deals in 2022. At $1.8 billion, Republic Services led in 2023 acquisitions, followed by Casella Waste Systems ($851.8 million), GFL Environmental ($711.1 million), Waste Connections ($676.8 million), and Waste Management ($173 million). The firms expect to keep up their acquisitive strategies in 2024.
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