CARE Executive Director Bob Peoples reports: The year 2023 is shaping up to be a challenging one for many in the recycling business. The challenges are associated with the slowing housing market and associated rising interest rates. Generally speaking, demand is down across many industries. Recycling industries are not immune to these economic headwinds and have no influence over what comes next. When the economy slows, companies start to work off inventories, which further depress demand for new materials and thus prices. The prices of most polymers have fallen dramatically in 2023 and especially in the last 4 months.
Now we have the initial wave of a UAW strike which will cause demand for some of the more profitable products we produce to plummet. Already polymer orders are being cancelled. Sales of new carpet, which are the primary source of old carpet to feed recycler operations, were down 15% in Q1 vs 2022 and again down 15% in Q2. These are big drops which also impact the revenue coming in to fund the carpet recycling program. The only positive is that the recycling rate as of the end of June is 35% and well ahead of the 2023 target of 31%. Our general opinion is that this down cycle will not turn around until mid-2024 at the earliest.
See the Q2 2023 results below