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.
    • 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

                                Mar 14, 2024 - Wholesale Sales of Recyclable Materials Softens
                                • The recyclable material wholesale industry is expected to experience slower sales growth in 2024 after a weak 2023 and solid gains during the pandemic. The industry’s year-over-year sales fell to -7.1 in 2020 before rising to 4.3% in 2021 and 9.2% in 2022, according to Inforum and the Interindustry Economic Research Fund, Inc. In 2023, sales growth fell to 3.3% and is expected to fall further to 2.3% in 2024 before rising just over 3% per year in 2025, 2026, and 2027, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                • Prices for several classes of curbside recycled materials improved in March, according to Prices for old corrugated containers (OCC) used to manufacture new containers increased 12% over February and were up 228% compared to March 2023. The national average price for post-consumer PET bottles and jars rose 4.6% in March compared to February, but PET prices were down 8.1% from a year earlier. Natural high-density polyethylene (HDPE) prices increased 1.4% over February but declined 56.3% compared to March 2023. Prices for color HDPE rose 5.7% in March from the previous month and were up 46.5% compared to year-ago prices. Polypropylene prices were unchanged in March compared to the prior month but were down 40% year-over-year. Sorted residential paper prices rose 8% over February and jumped 236% compared to March 2023.
                                • 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.
                                • About half of potentially recoverable fiber went to landfills in 2019, according to a report released in December 2023 by the National Renewable Energy Laboratory (NREL). The report found that of 110 million metric tons of fiber that entered the waste stream in 2019, 56% went to landfills, 8% was burned, and 38% was recycled. The NREL figures on fiber recovery and recycling differ significantly from those of the EPA, whose most recent estimate in 2018 suggests that 68% of fiber entering US waste streams is recycled. The NREL study estimates that the value of recoverable fiber that went to landfills in 2019 was about $4 billion, based on a three-year average of recovered commodity pricing. When factoring in the $4 billion in estimated tipping fees to landfill the recoverable fiber, the total economic gain of recycling the landfilled fiber would have been $8 billion.
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