What’s Happening With Aluminum, Glass, Paper, and Containerboards?

Commodities gurus in aluminum beverage cans, glass, paper, and containerboards gave a snapshot of how these materials are faring and projections for the future at last Wednesday’s WasteExpo session: Commodities Updates, End Markets & Export Opportunities (part 1). They discussed how extended producer responsibility legislation could impact their respective niches and a movement toward deposit systems. And they commented on what changed through COVID-19.

The session was moderated by Anne Germain, COO & senior vice president Technical and Regulatory Affairs, National Waste & Recycling Association. Presenters were Bill Moore, president Moore & Associates; Curt Bucey, executive vice president Strategic Materials; and Scott Breen, vice president Sustainability, Can Manufacturers Institute.

The aluminum cans arena

The pandemic sparked unprecedented demand for aluminum food cans and bottles, and Breen said the industry anticipates that demand will keep growing.

There are three main beverage can manufacturers and each announced capacity increases; one of them alone, Crown, will add 6 billion units in 2021, he reported.

The growth is good news for materials recovery facilities (MRFs). These items are one of their most profitable commodities, according to Breen. But they still face a big problem: up to one in four cans are missorted, calling for a need for more eddies and other metals sorting technologies. He encourages recyclers to invest in equipment to capture more, attesting they will see a return on their investment based on aluminum’s value.  

Breen moved on to discuss deposit programs, commenting the ground has shifted as far as how manufacturers who once fought these programs view them now.

“Container manufacturers and beverage brands are wanting to engage in deposit discussions because the numbers speak for themselves. There are higher recovery rates in the 10 states that have beverage deposit programs for all beverage materials,” he said. The recovery rate specifically for aluminum is 77%.

The overall recycling rate for aluminum beverage cans [both those with and those without deposit programs] is 46%, and average recycled content is 73%. Those are the highest rates of all beverage containers. So, the most sustainable circular beverage container in today’s systems is the aluminum beverage container, according to Breen.

Recycling Trends

Breen went on to speak of what’s happening now, and projections for the future, with recycling in general. Some main takeaways: consumers will keep looking for non-plastic packaging. There is more interest in reusables. There is more demand to go beyond simply recycling and ask what happens after these items are put in the bin. There will likely be more in-depth information on labels. And there is growing hunger for metrics on how recycling fights climate change and creates jobs.

“We will see better sorting. There will be more granular tracking. And there will be more tools for packaging designers to measure environmental impact of different options. Quantis [a sustainability consultant] has eQopack to measure environmental impact where brands can compare systems of ranked materials to make better decisions. I think we will see more tools like this,” he said.

Glass’s place in the market

The container industry will provide a steady outlet for what recyclers collect, particularly glass, Bucey surmised.

But fiberglass is ahead of the glass container industry for recycled content.

“There is a big shortage of fiberglass, and that industry is tied to housing starts, so there is huge demand as homes are built. Projections for the market are strong,” he said.

Strategic Materials added five or six abrasive plants in North America in the last five years to meet demand for this product and others, including for concrete, which adds strength; and for road construction such as foam glass, which can be used to make lighter bridges. Referring to the latter Bucey said, “It’s [a] small [niche]. We will see how big the wedge gets.”

Still, contamination is a problem and glass is hard on MRF’s equipment.

The answer is to separate it in the beginning. Bucey urges MRF operators to invest in maintaining and improving glass clean up systems and said if they do, they will have a “relatively short payback.”

Strategic Materials is also working to try and expand drop off programs, though it’s not easy to generate a lot of volume to make them sustainable.

What’s happening with paper and boards?

Paper and board make up the largest percentage of residential recyclables, about 65% of it, according to Moore who said recovered paper from residential programs is the biggest revenue component.

There has been high demand for old corrugated cardboard (OCC), which continues to grow as e-commerce flourishes.

“While OCC stands out, we are starting to see mixed paper demand go up. High grades are flat,” he said.

The increase in fiber use is leading to a higher recycled content, which now stands at 40%.

Exports have decreased significantly. Overall OCC exports are down but stable at 30%.

But China stopped taking dirty OCC and other countries are not geared up to handle marginal dirty recyclables, Moore said.

Looking specifically at mixed paper, in 2015 the U.S. exported 50% of it and last year exported 33%.

However, domestic use of recycled content is increasing. Corrugated boxes and paper board businesses are growing again after years of decline.

“This is the most robust timeframe I’ve ever seen with OCC. We have got projects all over the place, and there is more to come,” Moore said.

He expects the high demand and high prices of OCC to have a ripple effect.

“With prices up, board mills seek more mixed paper. And OCC demand will outpace supply, so other fiber will be needed to make paperboard grades,” he projected.

Mixed paper turned down during the recession, and in 2019 was at negative numbers. But in the first half of this year numbers are up to $45 and will come back as mills start to use more mixed, Moore said.

COVID-19 and Recyclables

With glass, when the pandemic hit deposits went down so less material came in through those programs, but people threw their glass in their recycle bins, so curbside collections went up.

“After COVID, I think we will go back to the mix from before [of deposit programs and curbside]. But volumes will not change,” Bucey projected.

As far as COVID’s impact on the fibers niche, COVID boosted ecommerce. And it’s still growing, which has been favorable to the corrugated box business, Moore said.

Potential impacts of EPR

“In terms of paper and EPR, Moore commented, “The devil is in the details as far as how things come out. Paper is included [in proposed legislation] so there could be a negative impact. EPR will be complicated in terms of how to allocate fees,” he said.

Are deposit systems a good thing?

There are deposit systems that can work favorably for MRFs, such as in California where if beverage containers with a deposit attached wind up in curbside bins MRFs can claim them.  So operators should get engaged in conversations about design of these programs, Bucey advised. It is one more place to capture valuable materials.