Folks, we have a problem. Neither the "love" potion as postulated at the royal wedding by the Most Right Reverend Michael Curry, the presiding head of the American Episcopal Church, nor the love messages from Bob Dylan and others of 50 years ago, as quoted by Luke Back, our local pastor in his "love" sermon, will solve this one. I know I sound cynical about love. I don't mean to. But lately all I've been hearing about is love, love, love. And trust me, love isn't going to solve this one. At the end of the day, this is all about garbage. Yup, garbage, and there's no way love will clean up garbage, at least as I see it!
The solution will ultimately be negotiated between buyers in China and sellers in the US. If our governments, both governments, can contain themselves, and stay out of it, supply/demand will create a compromise and we'll move forward toward a solution. Right now, the swords are drawn and we're into saber rattling. Let me explain.
The Chinese paper industry has historically purchased half of its secondary fiber from US suppliers. In fact, the two largest Chinese paper companies, Nine Dragons and Lee & Man, actually have US subsidiaries that buy enormous quantities of fiber. We're talking hundreds and hundreds of containers that were flowing to China (emphasis on were)! The problem: we've been shipping them fiber with high percentages of contaminants. The Chinese government has stopped shipments. They've said, "no more garbage." Therefore, fiber flow for export to China, generated here in America, has stopped. Materials are left unsold and sitting at ports, unloaded. It is sitting in warehouses, unsold. Tons and tons of waste paper, loaded with contamination. In fact, the Chinese now believe that 25% of what they've purchased over the last 5-10 years has been garbage--waste paper with high percentages of contraries.
The US is the largest generator of waste in the world. The US is also the largest processor and supplier of recovered paper and plastics in the world. The numbers and volumes are staggering. In fact, we are recycling/recovering so much paper and plastic that our infrastructure and domestic markets can't consume it all. Herein lies the problem: within the recovered paper industry, waste paper recyclers are dependent on off-shore markets to maintain consistent movement of their product. If the industry can't maintain off-shore relationships, an enormous imbalance develops causing two problems. First, prices crash, and...