June 27, 2018

Moody's: Recycling industry in a state of transformation

PHOTO | Contributed
PHOTO | Contributed
A more recent shot of baled fiber being stored at MIRA in Hartford.

Despite recent declines in the prices of recyclable commodities, consumer demand for recycling remains high, and many large waste haulers will see little impact to their credit ratings, Moody's Investors Service says in a new report.

Connecticut recycling facilities and haulers expressed concern in recent interviews about significant declines in the prices of recyclable commodities, which is linked to stricter importing rules in China, a major buyer of U.S. recyclables.

While Moody's calls recycling operations "woefully uneconomical" and "unsustainable," it says major industry players like Republic Services (which operates the Materials Innovation and Recycling Authority recycling facility in Hartford), won't see major credit impacts, partly because a minority of their revenues come from recycling operations.

"As contracts come up for renewal, waste companies are restructuring pricing on recycling services contracts to shift more commodity price risk to customers," Moody's analysts wrote. "In order to sustain the concept of recycling within the existing waste-management framework, waste haulers need to enlist greater consumer commitment to the cause, both financially (rate increases) and through more diligent recycling habits."

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