What’s Happening With Recyclables Markets?

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While some organizations are going out of business, others are warehousing these materials. Warehousing is a short-term solution, though, as storage only adds to the overall cost.

Another issue with warehousing is that many recycled materials cannot be stored long-term, as some fibrous items such as newspapers lose their value in just four to six months. We are carefully monitoring the situation and, in some parts of the country, are temporarily warehousing recyclables. However, we expect to work through our current inventories in the next couple of months.

This issue doesn’t just impact the companies who buy and sell these materials. Municipal governments are also being impacted, as they normally receive rebates for recyclable materials collected within their jurisdictions.

Rebates that Waste Management Recycle America provides for its customers are adjusted for market conditions and will adjust the rebates it pays local markets for materials according to current market prices. In down markets such as what we are in a net processing fee to clean recyclables to market specification will result in many areas of the country. It is important to note that net rebates paid to communities and businesses will rise when material prices increase.

We believe that the worldwide demand for these resources will grow again and that community and commercial recycling programs is key to supporting this demand. The success of recycling programs depends not only on efficient collection and effective processing, but also ultimately on the willingness of consumers to participate and buy products manufactured from recycled goods.

As the leading recycler in North America, we are in a strong position to weather this downturn. In fact, we believe there may even be some upcoming opportunities to grow our recycling business to support our sustainability goals of nearly tripling the amount of recyclables we handle from 8 million to 20 million tons by 2020.

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