Thursday, February 26, 2015

Material Recycling Businesses’ Returns and Prices

The annual and 10-K reports of approximately 35 companies, who indicate material recycling processes as an important part of their businesses, were examined for returns (gross profits or operating income) on the recycling processes.  In order to find returns on a company's recycling business (process) in its reports, the company must be either solely a recycling business or must report recycling as one of the reporting segments of the company.  Of the approximately 35 company reports examined, only 1 company is strictly a recycling business and only 8 companies have a reporting segment that is a strictly recycling business.  For the other companies, no return data is available on their recycling processes.

Materials recycled by the approximately 35 companies include one or more of the following:  plastics; paper; textiles; basic chemicals; catalysts (palladium,  platinum, and rhodium); ferrous and non ferrous metals; aluminum; rare earths; glass; rubber (tires); lead (batteries); concrete/cement; and asphalt.

Based on this report examination, here are some conclusions that I have reached about recycling businesses:

1.  For those companies that report on returns of their recycling businesses, the returns are very low.  Gross profits or operating incomes for the businesses that had such reporting average about 4% of sales for recent years reported on.   This, I believe, is a low percentage and generally reflects a not-very-profitable, satisfactory business.
2.  Few companies provide financial reporting on their recycling processes, probably because a recycling business is prone to low returns (based on conclusion 1 above) and/or the business has other attributes that prevent the business from being separated out as a reporting segment.
3.  Based on these poor return results, even though it is generally recognized that recycling produces materials at lower  energy costs than producing virgin materials from naturally occurring resources, the prices that companies would have to charge for the recycled materials to compete with the virgin material are too low to gain reasonably good returns on the recycled material.  In other words, the recycling process, likely for various reasons, is still more costly than producing the materials from naturally occurring resources.

4.  That few companies report separately on recycling processes (businesses) and for those that do, the returns are poor, suggest societal policy implications.  It seems to me that such implications include a less than optimal efficient and effective recycling of material of interest; a result that is not in society’s best interest. 

Friday, February 13, 2015

Textile Dye Use Statistics and Costs

An extensive search on the Internet uncovered the following statistics related to textile dye global use:

Approximately 42 million metric tons (MT) of polyester fibers and approximately 25 million MT of cotton fibers were used in textiles in 2014, a total of 67 million MT.   These two fibers accounted for about 82% of fibers used in textiles in 2014.

Also found was that approximately 7 million MT of dyes were used in 2014 to color textiles (most of which were used for polyester and cotton fibers).  This 7 million MT estimate agrees well with the assumption that about 10% of the weight of fiber material is generally the weight of the dye material used to color the fibers (10% times 67 million MT = 6.7 million MT).

Other sources suggest that about $5.5 billion of textile dyes were sold in 2014 (most of which were likely used on polyester and cotton fibers).  Dividing $5.5 billion by the amount of dyes used (6.7 million MT) gives $821 per MT ($0.82 per kilogram) as the cost of dyes used.   However, it should be pointed out that dozens of dyes, perhaps more, are probably used in significant quantities in textile coloring.  So this $821 per MT only represents, at best, a very rough “benchmark” for textile dye costs in 2014.  Very many dyes were likely used in significant quantities with costs varying substantially from the benchmark amount.  However, this benchmark amount could be useful in understanding where a dye is priced along the spectrum of dye prices.

Monday, February 2, 2015

Chemical and Material Shortage Alert – January 2015

The purpose of this blog is to identify chemical and material shortages reported on the Internet.  The sources of the information reported here are primarily news releases issued on the Internet.  The issue period of the news releases is January 2015.

Section I below lists those chemicals and materials that were on the previous Chemical and Material Shortage Alert list and continue to have news releases indicating they are in short supply. Click here to read the December 2014 Chemical and Material Shortage Alert list.

Section II lists the new chemicals and materials (not on the December alert).  Also provided is some explanation for the shortage and geographical information.  This blog attempts to list only actual shortage situations – those shortages that are being experienced during the period covered by the news releases.   Chemicals and materials identified in news releases as only being in danger of being in short supply status are not listed.

Section I.   Chemicals and materials that continue from December to be reported as in short supply are: iron ore (India); nickel (China); urea (India)

Section II.   Shortages Reported in December not found on the Previous Month’s List


Reasons for Section II shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: none
2.  Production not keeping up with demand: none
3.  Government regulations: none
4.  Sources no longer available: none
5.  Insufficient imports:  none

6.  Supply not keeping up with demand:  none