Markets Madness: Materials Stats, Trends and Economic Analysis

May 15, 2024 (webinar recap)

On May 15, Chaz Miller, renowned sage of recycling and CEO of Chaz Miller Associates, and Dr. Daraius Irani, Vice President of Strategic Partnerships and Applied Research and Chief Economist, Regional Economic Studies Institute at Towson University shared the latest recycling markets stats, trends and economic analysis for our region.

Dr. Irani led off with an overview of the trends and expectations for Maryland's near-term economy. He began with the potential of the AI economy and the challenges of managing the US economy, including the deficit, trade, and inflation issues. While Dr. Irani sees some positives in the economy, consumers are feeling the pinch of rising costs of gas, housing and groceries.

Miller focused on the growth of certain industries, such as paper, metals, and plastics, and the potential for aluminum cans to be recycled into new products. He also explored the impact of inflation on consumers' spending habits and the role of environmental considerations in product purchasing decisions. Finally, Miller discussed current trends in the paper and packaging industry, including the increasing demand for recycled paper and the impact of oversupply on the export market.

Download PDFs of both presentations below:

➡ Dr. Daraius Irani - Economic Analysis

➡ Chaz Miller - Markets Update

Here are key points from both presentations:

AI, Economic Challenges and Recycling Markets: The potential of AI in the economy will be clear over the next five years. While it’s still in its juvenile stage, AI will have a significant impact on the future economy. Currently, the challenge lies in the implementation and ethical concerns.

In the meantime, many challenges including global conflicts, continuing supply chain issues, workforce shortages, inflation, rising interest rates, climate change impacts, and political divisions, can have an impact on the economy.

The good news is the recycling markets (particularly paper, metals and plastics) are doing well at this time. However, they are also dependent upon the economy and consumer sentiment, which may affect future prices.

On the US economy as a whole: Inflation is down from its peak in the summer of 2022. GDP has increased for 5 straight quarters, which is above its long-term average of two and a half percent. This does spark higher inflation concerns. Important to note that consumption is about 70% of the GDP, which means despite higher interest rates, households are spending money on goods and services. Investment also ticked up.

Government spending has increased, raising the deficit. The argument can be made, however, that despite these concerns, the deficit can be considered a tool for managing big policy questions, not as a constraint. The trade deficit also increased in the 3rd quarter of 2023. It should be noted that this includes intermediate goods that are used in the production of other goods.

Unemployment remains at an all-time low (< 4%). Along with underemployment, both have stabilized at pre-pandemic levels.

On inflation, housing shortages, labor shortages, and consumer debt: While inflation has improved (3.5% in March 2024), it is a significant issue affecting daily life, particularly in higher costs for rent, gas, food, etc. Low inventories of affordable cars (a 30% increase in new and used car prices in 2020) and shortage of available housing combined with high interest rates have also led to an increase in consumer debt. Important to note that consumer sentiment plummets as inflation and interest rates rise. The good news is that it appears that interest rates may start coming down soon.

Job openings outnumber the labor force. The immigrant share of the labor force has reached a new high (18% in 2023) and is filling the gaps caused by demographic changes.

Maryland is also struggling with labor shortages - especially in hospitality, IT, health and transportation industries - seeing a drop of 69% to 66% of Marylanders in the labor force. The State is experiencing slowing growth, population decline, affordability challenges, and structural deficit.

On recycling markets: Overall, recycling markets are up including aluminum cans ($72.72/lbs.), steel cans ($222.50/ton), and residential mixed paper* ($62.50/ton). The good news is that paper mills in North America are expanding, increasing their capacity by 8 million tons. Prices of plastic materials, including HDPE and polypropylene, are rising as well.

There is, however, a decline in demand for glass (prices are increasing) possibly due to bottle deposit bills in several states as well as dual-stream recycling which complicates the recycling process. Likewise, demand for metal is down due to aluminum cans shipments. Finally, while prices for corrugated boxes are up ($110 /ton), many buyers feel it is too high.


What does the future hold? An oversupply of virgin resin and cheap recycled imports may drive down prices in the plastics market. While paper and metal are seeing some movement, mostly due to seasonal factors, inflation and consumer sentiment remain a top concern.

Consumers are cutting back on spending to deal with dwindling savings and higher costs, which in turn could mean lower demand for raw materials. And while consumers are willing to pay more for environmentally friendly products, their actions don't always align with preferences.

Only time will tell.

*If you have any questions on the economy, contact Dr. Irani at dirani@towson.edu. For questions on recycling markets, contact Chaz Miller at chazmiller9@gmail.com