What to Make of 2023?

Jul 5, 2023, 17:14 PM
Content author:
Arnulfo Moreno
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For the recycled materials industry, 2023 has been a mixed bag. Bank closures, Fed rate hikes and changes in the international market have been causes for concern.

“Recyclers continue to face a range of challenges and opportunities this year. Short-term challenges include commodity price and interest rate volatility, labor shortages, rising trade protectionism and economic uncertainty. However, easing transportation and supply chain bottlenecks, along with efforts to promote sustainability and decarbonization, bode well for the industry going forward” according to ISRI Chief Economist and Director of Commodities Joe Pickard.

ISRI’s economists provide the breakdown below to give a snapshot of where the economy is and what to expect in the near future.


The Fed continues what some call a “hawkish pause” keeping the federal funds rate between 5.0%-5.25%. Though committed to returning inflation to its 2% target, the Fed has stated that they will likely raise rates two more times this year. These continued increases affect the recycled materials industry directly as access to credit becomes tighter, consumer demand for goods becomes weaker as does the housing market. A strong housing market is good for recyclable materials end-uses (appliances, wiring, carpets) and for curbside collection volumes.


U.S. exports of recycled iron and steel (excluding stainless and alloy steels) during January through April 2023 declined 2% year-on-year by quantity to 5.1 million metric tons., according to the latest trade data from the U.S. Commerce Department. There was diminished demand from Turkey, Bangladesh, Taiwan and South Korea. Given the upcoming rate hikes and the geopolitical situation some of these countries find themselves in, this decline could continue.

Countries to keep an eye on that significantly improved their recycled iron and steel shipments from the U.S. include India, Vietnam and Thailand.


U.S. exports of recycled copper and copper alloys during the first four months of 2023 declined 14.5% year-on-year by quantity to 272,754 metric tons. Reduced demand from China, Malaysia, Thailand, and especially South Korea and Hong Kong were the main contributors to the decline.

Plastic and Paper

Recycled plastic also declined by 10.4% to 141,747 metric tons. There was improved demand from Canada, India and Vietnam and other markets. Unfortunately, this was not enough to offset diminished demand from Malaysia, along with reduced trade flows to Mexico, Indonesia and Germany.

Despite a 75% increase in shipments to Thailand, exports of recycled paper and fiber continued the trend lower and saw a 13.1% year-on-year decline during the first 4 months of 2023 to 4.7 million metric tons due to weaker demand from India, Mexico, Taiwan, Canada and Indonesia.

Causes and Outlook

In its June 2023 World Economic Prospects report, the World Bank continues to project a global economic slowdown this year, albeit with some upwardly revised 2023 projections as compared to the January report. According to the report’s summary, “The global economy remains in a precarious state amid the protracted effects of the overlapping negative shocks of the pandemic, the Russian Federation’s invasion of Ukraine, and the sharp tightening of monetary policy to contain high inflation. The resilience that global economic activity exhibited earlier this year is expected to fade.” The bank sees global growth slowing in the second half of 2023, with weakness expected to continue into 2024.

Although the latest Prospects report indicates global supply chain disruptions have eased, slowing global growth and rising trade protectionism are expected to weigh on global trade flows this year: “Supply chain pressures and supplier delivery times have dropped back to pre-pandemic levels as goods demand has weakened and global shipping conditions have improved. A rising number of new trade measures have been protectionist. The ongoing shift in global consumption toward less trade-intensive goods will likely continue to lower the growth rate of trade relative to output. This shift and subdued demand are expected to dampen global trade growth substantially this year.”

The Fed also revised their economic projections. Highlights of these changes from the current projection as compared to March 2023:

  • More than doubled their GDP growth rate for 2023 by 0.6 percentage points to 1.0%.
  • Mixed changes to the inflation indicators for 2023:
    • Core Personal Consumption Expenditures (PCE) inflation rate increased 0.3 percentage points to 3.9%.
    • PCE Inflation rate was lowered by 0.1 percentage points to 3.2%.
    • The 2023 unemployment rate forecast was lowered by 0.4 percentage points to 4.1%.
    • All indicators, except GDP, by 2025 are projected to remain above their longer run target rates.
For the recycled materials industry, 2023 has been a mixed bag. Bank closures, Fed rate...
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