There are signs that China's scrap dealers, hit hard by the downturn, may be recovering as prices pick up and manufacturers cautiously restock recycled products
For years China has been the world's dumping ground. Mountains of discarded plastic bottles, cereal boxes, cars, and other castaway items are shipped there to be melted, ground, or mashed into materials used by Chinese makers of everything from toys to packaging to steel girders. Some scrap dealers, such as paper maker Nine Dragons Holdings, made billions from the business. But the party came to an abrupt halt last fall as scrap prices fell by as much as 70% in the face of plunging demand. A pound of crushed soda bottles fell from 29¢ a pound on the U.S. West Coast to less than a dime as cash-strapped dealers in China couldn't pay up. "Even if you gave them the material for free, they couldn't afford to pay the customs duty," says Kathy Xuan, president of Romeoville (Ill.) plastics recycler PARC.
But as Chinese celebrate the weeklong Lunar New Year holiday, which started on Jan. 26, there are signs the Year of the Ox may be better for the trash business—and the overall economy. Aluminum alloy produced from scrap in China is now trading at $1,900 per ton. That's well off its August peak of $3,225, but higher than its November lows of $1,600. Waste paper has recovered to $100 per ton, after dropping from $230 to $90 last fall, while scrap plastic prices have clawed their way back to 14¢ per pound in the U.S.
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