The recycling sector is waiting for the upturn
The Echoes | The 29 / 11 / 2016
Declining commodity prices combined with a decrease in global material consumption affected 2015 in this sector. No improvement is expected before two to three years.
Morale at half-mast for the Federation of recycling companies (Federec). Its 1.300 members including Sita, Suez and Veolia for large groups and Derichebourg, Paprec and GDE (Guy Dauphin Environment) for the ETI, saw the turnover of their sector show a fall of 6,6%, from 9 billion euros in 2014 to 8,3 billion euros in 2015. Result, the sector lost 50 recycling facilities, falling to 2.250 in 2015 for 26.100 employees (-1,4%) compared to 2014 where the workforce recorded, instead, a progression of 1,8%. As for investments, they have gone from 524,4 millions of euros in 2014 to 476,2 millions of euros in 2015 (-9,4%).
"In terms of volumes of materials collected (99,7 million tonnes), the sector is stagnant compared to 2014," summarizes Jean-Philippe Carpentier, President of Federec which represents 80% of the sector. The period is difficult due to lower prices for raw materials such as fossils (oil, coal) or iron ore. Among the most affected segments, scrap and recycled metals suffer from the decline in global production and demand. The business of recycling metals is all the more difficult as iron ore, like oil, saw its price halved in 2014. "Same scenario for copper, aluminum and zinc that saw the value of their selling price decrease," explains the president of Federec.
As a result, since the price differential is less important, manufacturers prefer to buy virgin material. As a result, the recycled material is struggling to position itself. Let it be judged, the revenues of the ferrous metals sector (2,1 billion euros) fall by 31% compared to 2014 while that of the nonferrous sector (2,9 billion euros) down by 7,1%.
Best on the construction side
In addition, some materials are struggling to find outlets. Starting with the textile. The volume collected in 2015 (200.000 tons against 175.000 tons in 2014) is progressing but its markets are shrinking due to the instability of the African markets. On the wood, paper and cardboard side, despite a stable recycled volume, the markets are also limited by the closure, particularly in France, of paper and cardboard companies. Regarding plastic, the collected volume increases from 1,8% to 2015 with 876.000 tons. Here too, the turnover, 200 million euros, is shrinking (20%) because of the fall in the price of a barrel of oil.
In this panorama, a glimmer comes from the construction sector which constitutes an emerging field thanks to the law on the energy transition. Which obliges to valorize and recycle the building waste. 39 millions of tons were collected in 2015 for reuse in road works in the form of aggregates. In full expansion, this sector saw its sales increase by 2,6% in 2015 after a year of stability. Most tonnages (25,4 Mt) come from demolition and deconstruction, followed by building rehabilitation (11,3 Mt) and new construction (2,3 Mt).
However, Federec does not see an improvement before two or three years: "Global production and consumption are falling and the measures taken by the government, for example the Orplast device favoring the use of recycled plastics in goods produced, have limited in view of the difficulties encountered by the sector. "The outlook is confirmed by the latest forecasts by the World Bank that expect 2016 to lower the price of oil, natural gas and coal 16%. And 3,7% for raw materials such as metals and ores.