Monday, December 08, 2008

Recycling goes from boom to bust as economy stalls. Is St. L County Next?

Worries mount with each new load of cardboard, aluminum cans and plastics jugs dumped at West Virginia's largest county recycling center.

Faced with a dramatic slump in the recycling market, the director of the Kanawha County Solid Waste Authority has cut 20 of his 24 employees' work week to four days from five, shuttered six of the authority's drop-off stations and is urging residents to hoard their recyclables after informing municipalities with curbside recycling programs that the center will accept only paper until further notice.

It would seem that our St. Louis County Recycling Program may have a major problem coming up if the recycling centers that our County Haulers are taking their loads and will not be able to resell those loads at a profit. What will the haulers do if they do not have a place to take them to? It will be much more expensive for the haulers to take them to landfill sites.

This raises a serious question. How will the County Administration handle this potential crisis?

Just months after riding an incredible high, the recycling market has tanked almost in lockstep with the global economic meltdown. As consumer demand for autos, appliances and new homes dropped, so did the steel and pulp mills' demand for scrap, paper and other recyclables.

Cardboard that sold for about $135 a ton in September is now going for $35 a ton. Plastic bottles have fallen from 25 cents to 2 cents a pound. Aluminum cans dropped nearly half to about 40 cents a pound, and scrap metal tumbled from $525 a gross ton to about $100.

While few across the country appear to be taking such drastic measures, the recycling market has gotten so bad that haulers in Oregon and Nevada who were once paid for recyclables are now getting nothing or in some cases are having to pay to unload their wares.

In Washington State, what was once a multimillion-dollar revenue source for the city of Seattle may become a liability next year as the city may have to start paying companies to take their materials. Some in the business are describing the downturn as the worst and fastest ever.

"It's never gone from so good to so bad so fast," said Marty Davis, president of Midland Davis Corp. in Pekin, Ill., who has been in the recycling business since 1975. The turnaround caught everyone off guard, said Steven Kowalsky, president of Empire Recycling in Utica, N.Y.

Most recyclables are shipped to Asian countries that use the material to make products that are shipped backed to the United States to be sold. But the market shift is now jeopardizing hundreds of millions of dollars worth of long-term contracts for scrap metal as some companies that signed when prices were high are trying to cancel or postpone deliveries to take advantage of the cheaper spot market, Garino said.

Davis, of Midland Davis Corp. in Illinois, said he hopes to wait out the market and may rent warehouse space to store his more perishable recyclables, like paper, until he can find buyers. He has some room to stockpile cans and plastics because in July, when prices were high, he unloaded more material than during any month in the past 10 years. "It's going to be bleak for a while," he said. "We can just make our piles taller, and hopefully by spring, things will be a little better." Whether that will come as early as spring is debatable.

Just months after riding an incredible high, the recycling market has tanked almost in lockstep with the global economic meltdown. As consumer demand for autos, appliances and new homes dropped, so did the steel and pulp mills' demand for scrap, paper and other recyclables.

More information at: http://tiny.cc/CountyRecycle

4 comments:

  1. Anonymous10:29 AM

    I would have to comment that to speculate on the 'viability' of St. Louis County's recycling program, when you may not have any first hand information about this region, is irresponsible. Think about it. Take it to the landfill. Pay a tipping fee. Take it to a MRF - don't receive anything but don't have to pay a tipping fee either - which one makes more economic sense?

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  2. Anonymous10:05 AM

    This presents a major problem for the County and the municipalities, along with the Companies that were awarded the contracts. St. Louis Country REQUIRES that residents have RECYCLE service, and requires that companies provide the service. Thus, the Ordinance requires that companies loose money. Those companies will soon be back at the county looking for financial relief, thus driving prices back up. Had the free market been left alone, none of this would be happening. Government again creates a black hole that taxpayers will eventually have to fill in with Tax Dollars.
    County Government should have listened to the old saying: If it ain't broke, don't fix it.

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  3. Anonymous8:29 PM

    We are in a serious recession and the problem affects us all including St. Louis County and all of the trash and recycling services. Our haulers are going to be hit. For the county, it's just a matter of time.

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  4. Anonymous8:29 PM

    When the companies bid the trash/recycle contracts, they were considering getting $25 to $30 a ton for curbside recycled material. Now that the price has dropped to near nothing, they will need to make that revenue up somewhere.
    And, if the markets get worse, the MRFs will start eliminating some products, such as glass, and some plastics.
    The big companies that have the contracts with the county will have to come back for a price adjustment. It is simply economics.

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