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6.H. - Page 13 of 27 South Say Recycling, LLC SBWMA, RethinkWaste Facility Operations Contracts Manager Mr. Hilary Gans 610 Elm Street, Suite #202 San Carlos, CA 94070 Re: Fiber Market Explanation and Price Comparison Dear Mr. Gans, REM RECYCLINIC Febnrary 12, 2019 Recovered paper and cardboard, also known as fiber, represents approximately SO% of the commingled materials sorted in the MRF. SBR has some of the best fiber export marketing capabilities in the recycling industry, which remains dependent on export due to lack of domestic demand. As you know, end user mills throughout SE Asia have tightened up their quality requirements, and MRFs throughout CA are responding by making higher quality products. In 2018 China, then the largest end user of mixed paper in the world, banned the import of mixed paper. Although there are a few other markets in SE Asia for mixed paper, the price is very low. To make matters worse, there is trend in SE Asia for other countries to also ban mixed paper. By reducing the quantity of mixed paper being generated SBWMA has the opportunity to reduce their risk of having a sorted product without a market, either domestic or export. In addition, by creating a higher quality paper it can be sold at better pricing than Mixed Paper. Graph #1 below shows the monthly price for High Grade Paper (formerly known as Old News Paper) compared to Mixed Paper. In 2017 those prices were quite close to each other. However, in Q4 2017 when it became clear that China would indeed ban Mixed Paper the gap between High Grade Paper and Mix Paper grew. The effective date of the ban was based on cargo arrival in China, as such the price gap accelerated in November and December 2017. SBWMA BOD PACKET 02/28/2019 333 Shoreway Road I San Carlos, California 94070 Tel 650.802.8355 1 Fax 650.412.2495 1 SBRecycling.net AGENDA ITEM: 106 ATTACHMENT B — p2 200