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In July of 2017, the Chinese government notified the World Trade Organization (WTO) of its intent to ban the
import of certain scrap materials by year end. Since that time more details have emerged with Mixed Paper,
one of the largest commodities by weight included in single stream recycling, being one of the recycled
materials banned by the Chinese government. In addition, the quality specifications have been revised and
are much stricter than those used in the United States and the rest of the world thereby significantly limiting
what can be imported into China. Considering that anywhere from one third to one half for Corrugated (OCC)
and Mixed Paper respectively has been exported out of the United States, this has disrupted the global
markets for these commodities.
Single stream recycling has become the standard for most residential programs based on convenience but
requires the recycling industry to separate the various commodities in order for them to be used as raw
materials. This is not a perfect process and while the technology has improved, the process still relies heavily
on people to manually sort the material. The immediate response to the Chinese quality standards by Sonoco
Recycling, and the industry as a whole, has been to slow down the process and to increase where possible the
number of sorters. There are some longer term options but these require additional capital investments. In
either case this increases the cost to separate the commodities from any single stream recycling program, and
Sonoco Recycling has incurred these additional costs for the last six months but cannot do so indefinitely.
Therefore, we are revising our price structure effective March 1, to the following:
WAP ≤ $67.50/ton Charge of $35/ton plus the difference between the WAP and $67.50
$67.50/ton < WAP ≤ Charge of $30/ton plus 50% of the difference between the WAP and $77.50
$77.50/ton
Charge of $30/ton minus 50% of the difference between the WAP and
WAP > $127.50/ton
$127.50
WAP > $187.50/ton Rebate of 50% of the difference between the WAP and $187.50
Thank you
Kevin Fisher
Manager, Field Procurement