Recycling prices drop as needs fall back
Colorado Springs Gazette
Colorado Springs, CO Colorado
COLORADO SPRINGS, Colorado ” The recession hasn’t only driven down retail sales and wiped out jobs, it’s taken a toll on rubbish.
As demand fell for commodities such as paper, cardboard and plastics, so did prices at recycle mills where household and commercial waste is sold for reuse.
Prices for metals such as copper and aluminum dropped by about 50 percent since last fall before recovering a little.
“We’ve been in the recycling industry for 40 years, and the reality is that there are cycles in terms of highs and lows. That’s not unusual,” said Melissa Kolwaite, Waste Management’s manager of communications in Denver.
“What has made this a little unique is not only is it coupled with a down economy, but the drop happened quite quickly,” she said.
Participate in The Longevity Project
The Longevity Project is an annual campaign to help educate readers about what it takes to live a long, fulfilling life in our valley. This year Kevin shares his story of hope and celebration of life with his presentation Cracked, Not Broken as we explore the critical and relevant topic of mental health.
Newsprint fell to $50 per ton as of April 1 from $170 per ton in September in the southwestern United States.
But plunging prices have had no effect locally or nationally on recycling, according to industry experts and local trash haulers.
In Colorado Springs, the volume of recycled materials grew by 10 percent since September, when Waste Management began offering single-stream recycling here, meaning all recyclables can be placed in the same bin.
Moreover, recycling was ranked the second-biggest environmental challenge after water supply in the Pikes Peak Region 2009 Community Survey, a random poll of 500 people.
“People still put their material in the bin,” said Keith Christman, senior director of packaging at the American Chemistry Council, an Arlington, Va.-based firm that represents the chemical industry.
Unlike cities that operate recycling programs and must scramble to offset the loss of revenue, Colorado Springs leaves recycling to the private sector.
While recycling plants in other parts of the country have closed or turned away recycling trucks to avoid losses, local haulers don’t report those problems.
“We’re holding steady,” said Kolwaite of Waste Management. “We have long-standing relationships that have allowed us to move material that another hauler couldn’t.”
Kolwaite said Waste Management hasn’t had to lease additional storage space, even though it accepts recyclables from other haulers in Colorado Springs and elsewhere.
Bestway Disposal, a locally owned hauler, had delivered to Waste Management’s site in Denver but switched to Denver’s Alpine Recyclers after Waste Management changed the agreement, general manager Judd Staton said.
Although Kolwaite denied the changes were price-related, Staton said, “I’m sure it was based on how the markets have changed. It boiled down to that.”
Staton said his customers are recycling more since he started offering weekly single-stream service last fall for $5 a month for all types of recyclables. Waste Management in the last few months raised its monthly charge by 25 cents to $4.20, the first hike in more than two years.
“It’s going really well,” Stanton said, adding he’s confident demand will return.
“They haven’t said, ‘We can’t take anymore.’ Mills are still buying it but not paying as much. It’s still going out the door but not as fast.”
Christman, with the American Chemistry Council, said recycling has seen rapid growth.
From 2005 to 2007, recycling of plastic bags and film, which includes such things as plastic wrappers and dry cleaner bags, grew by 27 percent nationwide. Overall, recycled plastics totaled 4 billion pounds in 2007.
In addition, he said, a third of the top 100 recycling communities have added nonbottle rigid containers, such as margarine tubs.
“Recycling is done not just for the economic aspect but because it’s the right thing to do,” Christman said. “This (price drop) happens from time to time. As the economy recovers, so will the value of recycled commodities.”
Said Kolwaite, “The thing that’s important to focus on is, there are ebbs and flows in the industry. But based on the history in this industry, it will come back.”
Mark Arzoumanian, editor of Official Board Markets, a weekly newsletter known as the Yellowsheet covering the paper industry, isn’t as confident.
He said prices of newsprint, cardboard and mixed paper, a combination of low-grade paper including lunch bags and cereal boxes, have recovered “a teeny bit” because the mills realize “if they don’t support their suppliers to a certain degree, those suppliers are going to die and go away.”
But the long-range future may be a bit more “wobbly,” he said. That’s because the government created a tax credit for big paper producers who use wood chips to produce virgin paper rather than recyclables to make recycled paper.
“This is a real dagger in the heart of the paper-recycling industry,” Arzoumanian said. “Just when things start to get slightly better, the government comes along and says to Georgia Pacific and International Paper, ‘We’re going to reward you for using wood chips.'”
The Pikes Peak survey showed that of those who recycle, 53 percent do so with paper, newspaper and cardboard, by far the biggest share of recyclables in the region.