What’s Happening With Recyclables Markets?
by Wes Muir, Waste Management, Inc. 
on 12.11.08
Warehoused bales of reclaimed cardboard awaiting recycling. Image credit:Pulp and Paper Canada,
Over the past few months, the abrupt drop in prices for recyclable materials has taken many by surprise. Now questions are arising about the causes of the price drop and also how these lower prices are impacting residential and commercial recycling programs. A recent New York Times article touches on these points.
So why the new rock-bottom prices? One major reason is that the worldwide economic downturn has seriously slowed down the production of consumer goods and, as a consequence, the demand for recyclable materials such as fiber, plastics and metals has slowed as well. For example, fiber is the largest recyclable material in the waste stream, yet a large number of paper mills in the U.S. are temporarily closing and reducing the amount of fiber they purchase. Other mills overseas also dramatically cut back on their fiber purchases.
Like other commodity businesses, recycling markets are consistently changing and have to operate under supply and demand. Waste Management has been in the recycling business since 1971 and we’ve witnessed ups and downs in the market for recycled materials. For example, we saw recycling markets rise and fall in 1994/1995 and then again in 2000/2001. This current cycle actually saw prices rising from 2003 until the middle of 2008. This cycle, for the most part, has been a lengthy and positive run, largely because of increasing our country’s exports of recycled goods to countries like China, India and South America.
Of course, this positive pricing run has dramatically slowed down. When it comes to selling recycled materials, companies can sell them in two ways: via long-term contract or through the spot market which is the price for a commodity on any given day. It is this latter group that is particularly feeling the pinch of reduced volume demand and prices for recyclable goods.
What does a company do that can’t sell these recyclable materials?
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use the Anything Into Oil process from Changing World Technologies to turn all non metal waste streams into oil - including all sewage solids-
all plastics all cardboard all paper all wood all fabric
turn it all into oil
Given that raw recycled material now costs less, will this open up the market for some brilliant entrepreneurs to have a go at creating something new? Also, would the cost of fake wood, like the recycled stuff we see in decking also become cheaper?
It costs virtually nothing to store this stuff. Scrap metals especially are money in the bank, considering they already have huge amounts of energy sitting inside of them, compared to raw ores.
=== authors' response follows ===
In municipal areas it is often against zoning code to store raw materials outdoors. Sometimes exceptions are granted on a short term basis but usually the neighbors complain about fire hazard, rodents, etc.
Hello, Wes Muir here. I can't speak to whether new materials can be developed. Storing these materials is not cheap and at best a short term solution. Factors such as the volume of materials, the conditions that some of these materials need to retain their value (ie. news print and cardboard have a life of 4 to 6 months, plastics need to be washed for any extended period of time) are additional costs to collection and processing.