Q2 Recycling Report: Commodity Price Spike May Have Diminished, MRF Upgrades Continuing Priority

The financial performance of the recycling divisions of the largest public companies in the industry has been on the rise for several quarters. See the latest stats and commentary from the second quarter earnings reports.

Q2 revenue* Year-over-year variation
WM $468 million +17.88%
waste connections $64.68 million +60%
Casella waste systems $81.52M +45.66%

*Each business may categorize its recycling revenue slightly differently, such as including organics recycling activity. Republic Services results will be added after the company’s Q2 report. GFL Environmental does not report specific recycling revenues.

WM

  • The company has completed its sixth advanced MRF overhaul, at a site in Houston. It plans to complete two more this year and also enter a new recycling market. These automated facilities can see a 30 to 50 percent reduction in labor, or even more as was the case in Salt Lake City, according to CEO Jim Fish.
  • WM also claims that it can improve the value of products. “Previously, before rebuilding the [Salt Lake] factory, they had to sell all their mixed paper as low-grade paper. Now they are able to separate it. And they have a pretty large share of high-quality paper that obviously has a higher price tag,” Fish said on a recent earnings call.
  • WM said average market prices for the products it manages increased by 30% compared to the second quarter of 2021, to reach a weighted average of $131 per tonpartly due to “retailers and e-commerce manufacturers’ commitment to using more recycled content in their packaging,” although this trend is expected to moderate in the second half of the year.

waste connections

  • Company commodity values ​​were down slightly from the first quarter, particularly for OCC, and overall commodity prices fell about 20% at the end of the quarter, CEO Worthing Jackman said.
  • Jackman said the company’s two new MRFs in Illinois and Colorado are set to open in late 2023, allowing them to process the recyclables they were already collecting, avoiding third-party processing fees. Other automation and optical sorter upgrades are underway for other facilities, he said. The company announcement last month that it has now programmed or built 50 robotic systems from AMP Robotics at its facilities.
  • Waste Connections does not currently plan to acquire recycling-focused businesses, although Jackman said its recycling capabilities could expand further by acquiring businesses that include recycling equipment or services.

GFL

  • While GFL did not specifically share recycling’s place in its overall solid waste revenue category, the company noted that it saw an increase in revenue from commodity sales in the quarter. This was equivalent to $5.4 million in Canada and $3 million in the United States (Canadian dollars).

Casella

  • CEO John Casella said Rising recycled commodity values ​​contributed to its “best quarter in company history,” with commodity prices for metals, paper and plastics hitting a nine-month high in April. Since then, however, prices have fallen by around 20%.
  • Casella said he is investing $20 million to upgrade his Boston MRF, primarily to purchase robotic equipment. Casella expects the new equipment to be operational in the first quarter of 2023. The company recently installed new robotics and sorting capabilities at its Ontario County recycling facility in New York.
  • Investments in equipment in Boston and elsewhere are aimed at improving efficiency and throughput, reducing labor costs and improving material quality. “We will have less residue coming out of the stream, so less material that was now going to landfill can also be recycled. And we’ll also have less labor on our line, which is a really big win in this environment,” Casella said.

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