Saturday, February 07, 2009

St. Louis Area Recycle Market: Demand is still there, but the profits are not

It doesn't pay to recycle right now.

Businesses that collect product for recycling have been hit with plummeting profits for their services. The demand for paper, cardboard, plastics and metals have dwindled as the auto and housing markets have fallen.

Marty Daenzer said conditions are so bad that she will close her shop, Fairview Heights Recycling Center, at the end of the month.

Yes. It's important to recycle plastics and metals, even if I have to take them to another recycling location. No. It's not worth it. I'll just throw the stuff away and let the trash man pick it up.

Daenzer has operated the shop for the past five years. Within the past few weeks, she has seen the value of plastic fall from $180 a ton to just $5 a ton. Daenzer said she's losing money. The bottom has just fallen out of everything," she said. "It's not because we don't have enough business. We have more business than we know what to do with."

Gary Mordis, who owns Metro East Recycling Inc. in Collinsville and Vandalia, has seen copper prices drop from $3 a pound to $1 a pound. Aluminum cans that were fetching 75 cents to 80 cents a pound a few months ago are now only worth 30 cents per pound. Scrap iron prices have fallen from $300 a ton to $70 per ton.

"The market has been terrible," Mordis said. "It has hurt everybody. I've talked to recyclers all over the St. Louis area, and they are experiencing the same thing."

Rick Sieben is president of Belleville Recycling Inc. in Belleville and said the credit crunch and decreasing demand from the Chinese, a large buyer of recycled goods, has driven the falling recycling market.

"Because of the economy, nobody is actually selling new material, which means if they're not selling cars or houses, they don't need recyclables to make new parts," Sieben said. They're not selling cars, so they don't need aluminum to make aluminum wheel covers. They don't want aluminum. So it goes to a supply-and-demand situation where there is no demand, and prices keep dwindling because nobody wants it."

Mordis said his business has recently dropped by as much as 90 percent over the past few months.

Daenzer has heard analysts say that it will be 18 months to two years before the market returns to previous price levels. I can't wait two years," she said.

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