UK Recycling Industry Hit By Rising Costs, Rock-Bottom Recyclate Prices

The average price of mixed paper has dropped to £10 per tonne in March this year, as compared with the levels of £93 per tonne a year before.

SEATTLE (Scrap Monster): The recent report published by the Local Government Association (LGA) indicates that Chinese ban on imports have resulted in financial loss and burden for many councils. The Chinese restrictions have put brakes of recyclable exports. Further, it has led to drastic fall in prices of recyclables such as mixed paper and plastic. The Councils are closely observing the price trends to decide on the next step of action, the report noted.

The board had discussed the impacts caused by the Chinese waste import ban in its meeting held in February. The restrictions on import categories and revision of contamination limit by Chinese authorities have badly impacted exports of paper, plastic and other materials. Incidentally, paper and card accounts for almost 38% of the dry recycling collected by local authorities, whereas plastic makes up nearly 8%.

There has been a significant drop in prices of recovered materials since the implementation of the ban. The average price of mixed paper has dropped to £10 per tonne in March this year, as compared with the levels of £93 per tonne a year before. The value of plastics too has declined significantly. Despite increased exports to alternative markets, the overall UK plastic exports have recorded 18% year-on-year decline in the opening month of 2018.

The additional sorting procedures on account of reduced levels of contamination have cost the council nearly £500,000 per year, as per estimates. This is mainly due to increased operating costs at MRFs. Councils foresee tremendous loss in income from recycled materials. Estimates by Councils indicate loss of £3 million for the full year 2018-’19, if paper prices continue to stay at current levels. Prediction by a waste disposal authority states that income from dry recyclates is likely to fall sharply by 50%. It noted that low grade plastics exported to China does not have much demand in the UK.

Meantime, LGA stated that it will go ahead to achieve the ambitious goal of zero avoidable plastic waste by 2042.

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