Shanghai scrap collector Li Jie has a problem, one which would appear unusual to most: trash is getting too valuable.

“Ordinary recyclables like cardboard and plastic are now hard to come by,” he said. “Their prices have risen so much that there are so many collectors, including many companies.”The wave of new players has made it harder to find those materials, and others such as copper and aluminium. But even at small volumes, he said, the business remains profitable and he has no desire to leave.

In the first nine months of this year, revenue in mainland China’s waste recycling sector was up 1.8 per cent year on year, according to the National Bureau of Statistics, but profits jumped 63 per cent.

Analysts attributed this trend in large part to the prolonged conflict in the Middle East – now in its ninth month – which was still disrupting shipping in the Strait of Hormuz, a waterway that used to carry around one-fifth of the world’s oil supplies. The joint US-Israel war on Iran had driven up energy prices and pushed primary material costs higher, they said, and scrap prices had risen with them.

China’s emissions-reduction commitments were also boosting the resource-recycling industry, and government trade-in programmes designed to encourage consumption were making the recycling system increasingly important, they added.

Between early January and this week, the scrap ternary battery price index rose over 8 per cent on an annual average basis, according to data from bulk commodity consultancy Sublime China Information, with scrap yellow cardboard prices up nearly 11 per cent and recycled polythene prices over 27 per cent higher.

Scrap copper and aluminium prices have also been relatively high in China this year, with scrap copper up over 7 per cent this week compared with the start of the year, and scrap aluminium now slightly higher than January after pulling back from peaks recorded in April and June. Sublime China analyst Cong Peihao said the rise in copper and scrap copper prices was linked to the situation in the Gulf.

The closure of the Strait of Hormuz following the outbreak of war had tightened sulphur supplies and, combined with China’s ban on sulphuric acid exports, raised concerns about the rigid demand for sulphuric acid in parts of Africa and Chile for use in wet-process copper production, he said.

People generally just keep reusing household items as long as they still work, so there isn’t as much recyclable waste to collect as you might imagineLi Jie, Shanghai scrap collector“Market worries about potential disruptions to electrolytic copper supply created an expectation gap that drove both electrolytic copper and scrap copper prices higher,” Cong said.

In recent months, geopolitical fluctuations in the Middle East and the rise in copper prices had reduced the likelihood of interruptions to smelter production, he said, easing concerns about supply disruptions.

Sublime China analyst Sui Jie said the Middle East conflict had also been a key driver of rising recycled polythene plastic prices.

From late February, the conflict had disrupted global petrochemical supply chains, sending domestic virgin resin prices into a sustained uptrend, he said.

“The widening gap between virgin and recycled material prices significantly boosted downstream manufacturers’ willingness to buy recycled resin, providing direct support for the recycled plastics market,” Sui said.

At the same time, limited upstream scrap feedstock supplies had kept the market in a “tight supply, high prices” pattern, offering solid cost support for recycled polythene prices, he added.

The surge in waste prices has coincided with increased emphasis from Beijing on the importance of national resource security and green industrial transformation.

Its “dual-carbon” policy – which aims to see carbon emissions peak by 2030 and carbon neutrality achieved by 2060 – “has re-priced the value of scrap commodities”, said Xu Xiaoting, director of public affairs at Aifenlei, a Beijing-based company specialising in waste sorting and recycling.

“In addition, the trade-in policies of the past few years have, in the short term, created some extra supply-side volume for the scrap recycling industry,” she said.

China’s trade-in policy – backed by about 250 billion yuan (US$37.48 billion) in central government funding this year – subsidises consumers who replace old cars, home appliances and digital devices with new energy-efficient or smart products.

China’s top economic planning agency, the National Development and Reform Commission (NDRC), called the increasing amount of recyclable waste a growing “urban mine” in an article posted on its website in August.

“Against the backdrop of intensifying geopolitical rivalry and rising resource protectionism, strengthening domestic resource security has become a practical imperative for safeguarding industrial and supply chain security,” it said, urging the tapping of discarded mobile phones, computers, vehicles that had reached the end of their lives and old household appliances for additional resources.

Last year, China recycled over 230 million waste electrical and electronic products, dismantled 10.46 million vehicles and reused 400,000 tonnes (441,000 short tons) of batteries, according to a report from the China National Resources Recycling Association in April charting growth in the sector.

Overall, it recycled 417 million tonnes (460 million short tons) of renewable resources last year, up 4.1 per cent year on year and marking a third consecutive year of growth, the association said.

However, Li, the Shanghai scrap collector, said growth would be higher if consumers were more willing to spend.

“Overall consumption has remained weak this year,” he said. “People generally just keep reusing household items as long as they still work, so there isn’t as much recyclable waste to collect as you might imagine.”With people remaining concerned about the state of the economy and their future incomes, government figures show the trade-in programme has been losing momentum.

Home-appliance replacements in the first nine months were down about 20 per cent year on year, and overall sales of goods under the programme in the first half of the year fell to 1.1 trillion yuan, from 1.6 trillion yuan in the same period for 2025.

Individuals and businesses had swarmed into the recycling sector amid the recent price increases, Aifenlei’s Xu said, but most were small players.

“Most of the newcomers are operating without licences, occupying public spaces, piling things up wherever they like and polluting the environment,” she said. “There’s really no difference between them and the waste recycling stations of more than 20 years ago.”As a result, Xu said she viewed the short-term boom as a bad thing because it created urban management challenges, disrupted market order and posed safety hazards. But, she added, the influx of people joining the sector was good for the industry in the long run.

“The fact that capital and labour are both willing to come in means the industry has value and prospects,” Xu said. “Also, I think it can force the industry to become more standardised – with more people and intensifying competition, the government will have no choice but to regulate it.”Zhang Miao, the founder of Shanghai Ecocycle, a think tank focused on the circular economy, said that a manufacturing giant like China had huge demand for raw materials, and recycling waste materials was an important supplement to its supply chain.

“In the meantime, because China’s manufacturing sector is extremely comprehensive, the recycling industry that supports it is equally comprehensive,” she said. “As a result, China is very strong in terms of both the completeness of the industrial chain and its technological level.”But she called on the industry to improve sorting at the source to produce better quality recycled materials.

“If you don’t sort at the source, say by picking bottles out of mixed or kitchen waste, the recycled bottles will be full of contaminants,” she said.

The Institute of Public and Environmental Affairs, a Beijing-based NGO, said in a report released in January that while leading cities such as Suzhou and Shanghai had built “world-class sorting systems”, voluntary waste sorting was not yet common in most Chinese cities.

A city waste-sorting index compiled by the institute gave Suzhou, in eastern China’s Jiangsu province, a score of 96 out of 100 last year and neighbouring Shanghai a score of 84. But the average score of the 104 cities it assessed was just 18.04.