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 6,240 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 6,240 companies that employ 101,000 workers and generate $78 billion in annual revenue. The industry consists primarily of small family-owned businesses - 82% of firms operate a single location.
    • 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 Schnitzer Steel Industries (scrap metal).
    • 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 11, 2023 - Waste Firms’ Recycling Revenues Drop
                                • Many of the largest waste-hauling firms saw their recycling-related first-quarter revenues decline amid lower commodity prices for several types of recyclable materials. Republic Service’s recycling revenue declined 28.7% in Q1 2023 compared to the same period in 2022, and Waste Connections’ recycling segment saw a drop of 50.4%. Waste Management’s recycling operations’ revenues were down 21%. Waste Management’s CEO said that recycled paper demand might improve as new mills come online, and he expects a “significant uptick” in plastics and aluminum pricing, while prices for old corrugated containers (OCC) will see more modest price gains.
                                • The recycling rate for plastic bottles and the volume of plastics recovered increased in 2021, according to a report released in April by the Association of Plastics Recyclers (APR), the Institute of Scrap Recycling Industries (ISRI), and the US Plastics Pact. The US recycling rate for plastic bottles in 2021 reached 28.2%, up about 1% from 2020. The recycling rate for PET bottles increased 1.6 percentage points to 28.2%, while the high-density polyethylene (HDPE) bottle recycling rate remained roughly flat at 28.9%. In 2021, the volume of recovered plastic reached 5.08 billion tons, up 5.8% compared to 2020, when recovered plastic volumes suffered due to the pandemic. The APR suggests that to bring up plastic recycling rates, shifts in public policy are needed to improve collection and sortation, and stabilize recovered resin demand.
                                • The global recycled aluminum industry was valued at $4.8 billion in 2022 and is forecast to see average annual growth of nearly 9% through 2031, reaching $10.3 billion, according to a recent report by Transparency Market Research. Several factors are expected to drive recycled aluminum demand, including growing use in the automotive and construction sectors, concerns about the environmental impact of mining, and the lower cost of recycled aluminum compared to virgin aluminum. More advanced technologies in removing impurities during the recycling process have also improved the quality of recycled aluminum.
                                • In April, prices for some types of recovered fibers showed improvement, according to Prices for old corrugated containers (OCC) used to manufacture new containers rose 22% in April but were down 76% compared to April 2022. Mixed paper prices were up 60% in April over March but were off by 89% year over year. Sorted residential paper prices were unchanged in April compared to March but were down 75% from April 2022. The national average price for post-consumer PET bottles and jars rose 1.6% in April compared to March, and PET prices were down 57% from a year earlier. Natural high-density polyethylene (HDPE) prices increased by 0.7% over March and grew 45% over March 2022. Prices for color HDPE rose 7% in April from the previous month but were down 44% compared to April 2022. Polypropylene prices increased 0.7% in April compared to the prior month but were down 72% year over year.
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