COVID-19: OPPORTUNITIES, CHALLENGES, REACTIONS
Wendy Larson, IRA Board of Directors, Midland Davis Corporation
April 14, 2020
At the mid-point of April, the recycling industry began to understand and strategize about the challenges of COVID-19. Those who can are working from home, while plant and operations personnel continue to unselfishly service recycling collection and processing needs. Fortunately, most state governments have deemed recycling “essential” as it provides an important secondary supply to paper mills and other consumers. For that we are thankful.
Ironically, the virus and ongoing human shifts in habit have presented some opportunities for the industry, even in the short term. Toilet paper is and continues to be in short supply, and most tissue mills are reacting to the challenge by ramping up production wherever possible. Sorted Office Paper and other freesheet grades are in strong demand; this is anticipated to continue in the short term. Shredders and shredding companies are slower since most are “working from home,” and office paper is nearly non-existent. In addition, there are reports that still-open offices are resistant to allow shredding personnel (or any outside non-employees) into the office due to the risk of COVID-19 spread. The mills will continue to navigate how to keep these grades coming consistently, pushing the pricing upward.
Additionally, as we spend most of our time at home avoiding social contact, shopping of any type has picked up online. Our industry has been positively affected by this as the need for shipping boxes has greatly increased. OCC and mixed paper especially have seen increased movement and pricing structures.
Challenges related to COVID-19 are affecting the industry as well. Transportation rates have increased as resources in some cases are being used for government emergency response or critical equipment. India recently announced a shutdown of most business, causing containers filled with material to backup and in some cases be detained or even quarantined. The expectation is that this material will likely flood back into the U.S. domestic market, possibly causing disruptions.
Industrial OCC is also experiencing slower generation, as some businesses have either slowed down or closed due to non-essential status, while consuming mills are running strong and needing more tons. This imbalance has and will continue to cause a deficit on tons, and with that an increase in pricing structures.
Printers in Minnesota and some other areas have been categorized as “non-essential” and temporarily closed. These grades feed into mostly the tissue industry, and will show strength in pricing due to short demand.
As a reaction to the COVID-19 crisis, it seems as though most paper mills have limited outside visitors, and have implemented safety procedures to help reduce virus spread. Most recycling operations have continued with an increased focus on social distancing. In some cases, customer drop-offs have been limited. Grocery OCC tons have increased in the last few weeks, although contacts are reporting that tons have now “settled” to a more “normal” level.
As we all navigate the new normal in our field and in the world, please remain diligent on safety, appreciate the time spent with loved ones, and continue to remember that we work in an industry that has maintained the course through many generations.
- Occupational Safety and Health Administration (OSHA) >>
- Resource Recycling, Coronavirus Impacts on the Recycling Industry >>
- Institute of Scrap Recycling Industries (ISRI) >>
- Solid Waste Association of North America (SWANA)
- National Waste and Recycling Association (NWRA) >>
- United States Composting Council (USCC) >>
- U.S. Chamber of Commerce >>
- Small Business Administration >>
- National Waste & Recycling Institue - Healthcare Waste Institute >>
- WasteDive: Waste and recycling trade groups issue coronavirus guidance for worker safety >>
- Iowa Department of Public Health >>
- Iowa Economic Development, IOWA BUSINESS RECOVERY ASSISTANCE >>
- Iowa Small Business Development Center >>
- Iowa Association of Business and Industry >>
- Iowa Workforce Development >>
- Iowa Waste Reduction Center (IWRC) >>