Demand for recyclable materials will grow as manufacturing and construction activity rise.
Los Angeles, CA (PRWEB) July 07, 2013
Demand for the Recyclable Material Wholesaling industry is ramping back up. According to IBISWorld Industry analyst Deonta Smith, “the recession decimated demand for recyclable materials, as declining consumer confidence led to lower consumption and manufacturing activity”. In response, the federal government implemented numerous initiatives in 2009 to assist the industry in its turnaround. In 2008, slow growth in consumer spending and a drop in industrial activities prompted many wholesalers to lower material prices to offload accrued inventory during the recession. In addition, purchases made by manufacturers have fallen significantly, forcing some wholesalers to leave the industry during this period. High steel scrap prices are positively correlated to steel prices. Consequently, during the recovery, surging steel prices prompted steel manufacturers to acquire recyclable material wholesalers to widen their margins.
Global industrial firms have recently emerged as one of the strongest buyer markets for recyclable products. A number of factors have led to higher demand from this market. For one, as a result of falling operating costs, wholesalers can offer lower prices to the international manufacturers, making recyclable materials a more viable alternative to traditional inputs among these buyers. Due to these trends, IBISWorld expects revenue to jump at an annualized rate of 9.9% to $614.7 million during the five years to 2013. Regulatory controls and more green activities are expected to help push revenue up 1.9% in 2013. Over the five years to 2018, revenue is forecast to continue its upward trend. “As demand for recyclable material rises, so will the number of industry companies”, says Smith. The industry is set to benefit from the increasing manufacturing and construction activity spurred by favorable consumer spending levels. Likewise, stronger sentiment toward green and sustainable products will further push up demand.
Market share concentration in the Recyclable Material Wholesaling industry is low. Market share concentration has increased over the past five years because a number of companies exited the industry following the recession. Additionally, larger companies are looking to expand their footprint in nearby areas, where they can add value and turn once-struggling operations into profitable ventures. Smaller wholesalers typically operate in manufacturing hubs, with easy access to road, rail and maritime distribution and supply channels. The largest companies in the industry are ArcelorMittal Montreal, Steel Dynamics Inc. and Sims Group Limited.
For more information, visit IBISWorld’s Recyclable Material Wholesaling in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry wholesales automotive scrap, industrial scrap and other recyclable materials. The industry includes auto wreckers that dismantle motor vehicles for wholesale scrap. It also includes establishments that break up, sort and wholesale all forms of scrap iron and steel using power processing equipment, such as cranes, hydraulic shears, baling equipment and cable strippers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
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