National Bureau of Statistics data shows that in the first half of 2026, above-scale enterprises in comprehensive utilization of waste resources generated revenue of 570.5 billion yuan and total profits of 12.74 billion yuan, up 104.5% year-on-year, ranking second in profit growth among 41 major industrial categories, surpassing the computer and communications and nonferrous metal smelting industries.

Key points

  • In H1 2026, above-scale enterprises in comprehensive utilization of waste resources generated revenue of 570.5 billion yuan and total profits of 12.74 billion yuan, up 104.5% year-on-year
  • Waste paper prices rose from about 1,500 yuan per ton to just over 2,000 yuan, while waste plastics rose from 8,000 yuan per ton to 13,000 yuan
  • China National Resources Recycling Association report: in 2025, 11 mainstream categories had a total recycling volume of 417 million tons and a total recycling value of 1.39 trillion yuan

The profit surge comes from three forces
First, international supply chain volatility. The ongoing Middle East conflict has disrupted key shipping routes, some overseas aluminum plants and chemical bases have cut capacity, global industrial raw material supply has tightened, and the cost of purchasing virgin materials has risen, prompting manufacturers to turn to more cost-effective recycled materials.
Second, domestic demand expansion. New energy, photovoltaic, and power grid renovation projects are being advanced on a large scale, driving rapid growth in demand for base metals such as copper and aluminum. China's dependence on imported copper concentrate exceeds 90%, so once overseas supply fluctuates, recycled metals become a rigid source for manufacturing.
Third, policy support. In January 2026, the National Development and Reform Commission proposed guiding localities to allocate no less than 1% of industrial land for resource recycling projects; in June, the 15th Five-Year Plan for Circular Economy Development was issued, specifying that by 2030 the output value of the resource recycling industry should reach 8 trillion yuan; that same year, the government work report arranged 250 billion yuan in ultra-long special government bonds to support consumer goods trade-ins.

Scale is expanding, but profits are concentrated among large enterprises
There are already more than 222,000 surviving materials recycling-related enterprises nationwide, with nearly 9,700 newly registered in 2026 alone. But the high-profit segments are concentrated at the back end of the aluminum can industrial chain: from residents selling, waste pickers collecting and transporting, community recycling stations baling, to professional sorting and dismantling, and finally entering steel mills for smelting, among these five stages, back-end businesses such as home appliance dismantling can achieve profit margins of 20% to 40%, while front-end small players can only earn labor fees.
A frontline recycler in Zhengzhou reported that now they earn only 0.15 yuan per jin collecting cardboard door-to-door, and filling a truck yields less than 40 yuan in profit; two years ago, the same load could earn 120 yuan per trip. At the same time, environmental thresholds are rising. After the end of 2025, many places require recycling sites to have impermeable flooring and dust removal equipment, with minimum hardware renovation costs of 20,000 to 30,000 yuan, putting obvious pressure on small individual operators.

Listed companies show clear divergence
Huaxin Lvyuan had revenue of 862 million yuan in H1 2026, up 34.49% year-on-year, and net profit of 56.76 million yuan, up 20.15% year-on-year; Feinan Resources saw first-quarter net profit rise sharply, with the company saying higher metal prices improved profitability; Zhongzai Zihuan, by contrast, forecast a loss of 380 million to 560 million yuan for 2025, turning from profit to loss. Within the same track, the difference in performance mainly depends on capacity layout.

China already ranks first globally in recycled metals
Among global output of recycled copper, aluminum, lead, and zinc, China's annual output is 20.57 million tons, accounting for 34.7% of the global total, ranking first. In 2021, China's material recycling rate of waste plastics reached 31%, about 1.74 times the global average. The 15th Five-Year Plan for Circular Economy Development proposes that by 2030, annual recycling utilization of major renewable resources should reach 510 million tons, and comprehensive utilization of bulk solid waste should reach about 4.5 billion tons.

For those in second-hand clothing trade and textile recycling, this market cycle confirms the same logic: demand for recycled raw materials is being pushed up jointly by rigid manufacturing demand and policy targets, but those who can truly capture profits are asset-heavy enterprises with sorting and dismantling capacity; front-end small players face thinner price spreads and heavier compliance costs. The industry is moving from scattered individual operations toward industrialized operation.

Source: China's most inconspicuous business suddenly became hot: in the first half of this year, scrap business profits surged 104% · Originally published on 2026-10-04