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 Schnitzer Steel Industries (DBA Radius Recycling).
    • 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

                                Nov 13, 2023 - Wages Rise
                                • Sales and inventories for miscellaneous durable goods, which includes recyclable materials wholesalers, were down in mid-2023 compared to a year earlier. While recyclable materials wholesaler employment was down slightly in Q3 2023 compared to a year earlier, wages increased significantly. Amid rising labor costs and difficulties attracting enough workers, some companies that operate materials recovery facilities are investing in automated sorting technologies, including AI-enabled robotics.
                                • Three of the largest waste-hauling firms saw moderate revenue growth in the third quarter of 2023, but they continue to cope with weak pricing for recycled commodities. Republic Services revenue increased 6% in Q3 2023 compared to the same period in 2022, but its recycling revenue declined by 12.2. Waste Connections’ total revenue grew by 9.8% in the third quarter, but recycling segment revenue was off by 25%. Waste Management saw its total revenue rise 2.4% in Q3 2023 as its recycling operations’ revenues were down 12.8% year-over-year.
                                • A temporary surplus of copper is keeping the metal’s price low despite an anticipated surge in demand led by the shift to electric vehicles (EVs) and renewable energy, according to The Wall Street Journal. Copper prices have fallen about 15% since early 2023 amid China’s slower-than-expected rebound from the pandemic, weaker global manufacturing activity, and normalized production from mines in Chile and Peru that were disrupted during the pandemic. Some mining firms are waiting for prices to rise before increasing their production. Copper prices could rise quickly amid more robust demand from the clean energy transition, creating supply shortages, according to Goldman Sachs.
                                • The waste management industry’s leading publicly traded firms continued their multi-year consolidation spree in the first half of 2023, closing a collective $1.98 billion in new deals, according to Waste Dive. Republic services led in total value, spending $703.2 million on solid waste and recycling acquisitions, including purchasing GFL Environmental’s holdings in Colorado and New Mexico. Casella Waste Systems had $547.3 million in first-half acquisitions, including the purchase of GFL’s assets in Delaware, Maryland, and Pennsylvania. Waste Connections bought seven unnamed solid waste and recycling operations totaling $68.5 million. Aside from purchasing GFL’s hauling assets in Nashville, Tennessee, Waste Connections’ M&A strategy was conservative in the first half of 2024, citing high valuations. Canada-based GFL spent $16 million on several small operations, most of them in solid waste as it completed a series of divestitures aimed at streamlining its holdings.
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