It's time to make market transitions that were anticipated
and advocated by Zero Waste advocates but are now essential to keep
materials out of landfills and incinerators, including:
I'd encourage others to add
to this list, and help us all focus on what needs
to be done. Then state recycling associations, and other reuse,
recycling and composting advocacy groups and trade associations need to
work with state and federal agencies to adopt these policies and respond
quickly before programs all over the world fall apart that we have worked
so hard to create.
- IMPLEMENT EPR PROGRAMS for normally recyclable materials, like have
been implemented for toxics over the past 10 years. Current prices
of reuse, recycling and/or composting of products and packaging need to
be paid for by manufacturers, first importers or retailers, shifted from
- Cities should adopt policies to REQUIRE RECYCLING GOALS BE MET (e.g.,
mandatory source separation recycling ordinances, and banning recyclable
materials from landfills). Cities should allow recyclers on an open
competitive basis to charge for recycling services. Then let market
forces establish what the current value of the commodities are, and what
additional support is needed from fees for services.
- Back to basics - MARKETS FIRST. New programs should not be
started until they have identified markets and their
specifications. Existing programs need to tighten up on quality
standards through more aggressive outreach and education to the public,
and more careful sorts of materials collected. No city programs
should accept "residue" amounts from curbside recycling
facilities of more than 10%. If residues are higher than that, it's
an indication that there is something wrong with the system of education,
collection and/or processing.
- LOCAL MARKET DEVELOPMENT - Cities should enlist their economic
development professionals to work with recyclers to support existing
local reuse, recycling and composting businesses, and to help them and
end-users to expand locally. Work together on regional or statewide
basis to develop new uses for reused, recycled and compost products.
- FOCUS ON ORGANICS AND C&D - These streams are usually the top
largest components of materials still discarded. They also rely
primarily on local uses of materials. By focusing on these, cities
are not as subject to worldwide market conditions for traditional
- STRENGTHEN GREEN BUILDING REUSE SPECS - Require ALL buildings in a
community to meet some level of Green Building standards, and require or
provide greater incentives for higher level of reused products, to
stimulate deconstruction and reuse, which are inherently LOCAL markets.
- RECOGNIZE CLIMATE CHANGE AS DRIVER - Zero Waste is the single fastest
and most effective way for local governments to address climate
change. The above policies should be included in local community
and business sustainability and climate action plans to help accomplish
these market transitions.
At 05:59 PM 11/3/2008, Monica Wilson wrote:
Dear Greenyes-ers ?
This discussion has been a real eye opener for those of us following
recycling, but not involved in day-to-day market activity. Today?s Contra
Costa Times ran a front page article called ?Recycling in the dumps?
about the local impact of recycling commodities prices falling (article
This seems like a potential crisis for recycling and zero waste if prices
hold in the long term.
How are you talking about the future of recycling? What do you expect the
next year will bring, or is there any way to predict this? What might it
mean for potential growth in new recycling programs and new jobs in the
Thanks for your thoughts,
Monica Wilson, GAIA
Recycling in the dumps
By Matthias Gafni
Contra Costa Times
Article Launched: 11/02/2008 09:15:25 PM PST
BENICIA -- As a forklift stacked two more bales of recycled newspaper on
a growing paper mountain, Steve Moore frantically searched for warehouse
space to store the suddenly worthless commodity.
The pile of paper mostly from central Contra Costa residents' recycling
bins represents an international problem that could raise homeowners'
garbage rates and dent the drive to cut waste sent to landfills.
Moore's stack has reached its height limit at 16 feet and 1,000 tons. He
has squeezed a week's worth of paper into the shrinking open space behind
his Benicia recycling facility.
"Our forklifts can only go so high," he said, only
Moore, Pacific Rim Recycling's owner, has taken the unprecedented step of
leasing two acres in Oakland to store some of Contra Costa's recycled
waste, and he is searching for more warehouse space.
He is not alone.
The dominos-like collapse of the housing, credit, stock market and
commodity collapses click-clacked into the recycling industry, and it
fell fast. In six weeks, the price for recycled cardboard has gone from
just under $200 a ton to $30 to $40 a ton if you can find a buyer,
"This isn't volatility this is the bottom falling out," said
Paul Morsen, executive director of Central Contra Costa Solid Waste
Authority, which contracts with Pacific Rim to take its recyclables.
Recycling plants nationwide are debating whether to charge disposal
companies for the recycled goods that garbage companies bring in. Most
recyclers pay for the materials, then sell them for a profit.
If recyclers start charging, disposal companies likely would raise
garbage residential rates. With storage space dwindling and material
shelf life limited, it is possible that recycled materials will be sent
directly to landfills, which could violate state regulations and set back
The global economic slowdown, particularly in China, has tanked the
market during a historically peak period Halloween and Christmas
seasons. China, the largest consumer for West Coast recyclers, has almost
stopped buying paper and most other recyclables, industry analysts say,
creating a raw materials bottleneck.
In some instances, ships full of recycled materials sit anchored off the
Chinese coast with no buyers. In other cases, Chinese buyers break
contracts and force sellers into taking bargain-basement prices, industry
analysts and brokers said.
"The entire industry is upside down right now," Moore said.
"The question is how long people can hold on for or will they have
to close their doors."
Commodities recycling exploded as the world's economy thrived a few years
Recycling plants found endless customers who paid top dollar for raw
materials, particularly in booming Asian markets. The trade kept waste
out of landfills, increased efficiency and created a lucrative
California mandated that municipalities divert half their waste from
landfills. Central Contra Costa's waste authority received a cut of
recycling proceeds $2.33 million this past fiscal year. It used the
money for new recycling programs, such as a test of turning restaurant
food waste into electricity.
Pacific Rim receives 5,000 to 6,000 tons of recycled materials a month,
three-quarters of it paper products. Moore estimated that earlier this
year he could sell his materials for about $800,000 a month.
"The industry has enjoyed very good success the last few
years," he said.
About the only problem the industry had was a sharp increase in metal
thefts. Thieves have been stealing suddenly valuable metals off just
about anything, sometimes even war memorials and gravestones, to sell as
When China opened its Nine Dragons paper mill in 1995, recycled cardboard
prices jumped within months from below $25 a ton to more than $225 a ton.
China is the No. 1 consumer of recycled fiber. Other Asian countries,
such as South Korea and Japan, used to purchase recyclables but now buy
internally. China, however, needs recycled paper because it has few
forests and its economy is based on exporting products that need
packaging, said Brook Edwards, author of The Brown Sheet, a paper
recycling industry newsletter.
Typically, China buys the bulk of its paper from October to December, to
prepare packaging for all the toys, electronics and other products
exported for the holidays.
But as the world economy stiffened and China sold fewer products, a
backlog began. Normally, Chinese buyers could take out loans to bridge
the gap, but the credit crunch prevented that, said Bob Wallace of WIH
Resource Group, a Phoenix-based waste management, recycling and
logistical consulting firm.
Declining construction and car sales sent metal prices plummeting, as
steel was no longer in demand, he said.
China began playing hardball, Edwards said.
"They don't want to buy anything until they know we're at a
bottom," he said.
On Thursday, recycling broker Jim Fagelson was forced to drop the price
of two shipments of cardboard heading to China by $10 a ton, two weeks
after it left Los Angeles with a set agreement. Rather than argue the
point with his Chinese buyers and risk having the price drop to today's
rate of about $80 a ton, Fagelson reluctantly agreed to sell for $120 a
"They kind of have you," said Fagelson, vice president of
Newport CF Intl., a Southern California recycling brokerage firm.
"It's truly unethical and borderline illegal. But to tackle it in
the courts and overseas isn't practical."
Taking advantage of the recycled materials glut, Chinese buyers are
wielding a powerful ax. Buyers will find a small mistake in letters of
credit and quote a lower price to brokers once shipments are halfway
across the Pacific Ocean. With few other options, most brokers are forced
to accept it, Fagelson said.
Some speculators shipped tons of scrap metal and materials to China
hoping to negotiate prices once there. This was not a problem during the
good days, but now ships full of recycled materials are anchored off
China's coast with no buyers.
"It's about as bad as I've seen it, and I've been doing this my
entire life," said Fagelson, a 35-year industry veteran.
The domestic market for recyclables is small and other options have been
exhausted, Edwards said. For instance, once the Chinese market slowed,
trains with Midwest recycled waste were diverted from Los Angeles to
Mexico. Now, Mexico is taking no more materials, he said.
Joe Recycled Sixpack pays
Moore needs a warehouse to keep his paper dry; waterlogged bales are
useless. Storage costs money.
"I'm losing a lot of money right now "... a lot of money right
now," he said.
Moore has some financial leeway, but he sayid that smaller
"scrappers" and other recycling plants, many of which can not
get credit, will shutter.
The facilities that stay open may have to pass costs on to others.
Pacific Rim pays the Central Contra Costa waste agency $30 a ton for
recycled materials picked up from homes mostly along the Interstate 680
corridor. That price fluctuates, but may flip Pacific Rim asks the waste
authority to pay to take the materials.
"That's a very serious concern of ours and we're watching the market
very closely, hoping it will loosen up," said Morsen, the waste
authority executive. "If it eats into the operational budget then
customers "... will wind up paying more."
Many recycling centers are renegotiating their contracts with cities,
said Wallace, who consults recycling facilities across the country.
Green no more
If Moore cannot sell his materials, he may have to send recyclables to
landfills when he runs out of storage space.
That prospect does not make Morsen happy.
"In terms of a green approach, paper's very recyclable. If you take
something that good and such a rich commodity and stick it in a landfill
"... that would be a giant step back," he said.
It also might violate state law. The state requires half of all waste
from cities and counties to go somewhere other than into landfills, with
the percentage scheduled to rise in the next few years. The state could
fine non-complying cities or counties $10,000 a day.
"We will work with local jurisdictions to help them be in
compliance," said Beatriz Sandoval, a spokeswoman for the state's
Integrated Waste Management Board.
One benefit of the struggling economy is less waste, which will make
hitting diversion laws easier, she said. Nationwide, garbage is down 10
percent to 40 percent in different regions, mostly due to declines in
housing and retail waste, Wallace said.
Still, East Coast and Canadian recycling centers have started sending
recycled materials to landfills, Moore said.
Reach Matthias Gafni at 925-952-5053 or
The crumbling global economy has taken down the recycled paper market in
the past few weeks. Here's how much buyers were paying per ton as of Nov.
1 in the Bay Area market, with decline since Oct. 1.
Nov. 1, 2008
Oct. 1, 2008
$40 to $45
Sources: The Brown Sheet and The Yellow Sheet
NOTE: The numbers in the table above are from the print version of the
Contra Costa Times, 11/3/08 ? the table in the online article had
different numbers that don?t look right:
Nov. 1 Oct. 1
Cardboard $40 to
Mixed paper $25 to
Newspaper $65 to
Office paper $130 to $140 $70
Sources: The Brown Sheet and The Yellow Sheet
mailto:GreenYes@no.address] On Behalf Of Bob
Sent: Friday, October 31, 2008 9:04 AM
To: 'David Biddle'; 'GreenYes'
Subject: [GreenYes] Re: Markets Tanking
Ironically, we conducted a small-scale study on the subject recently for
a client and what our industry sources told us, specifically commodity
brokers (who are closest to the action ? and whose well being depend on
making money of the commodities), is that they have not seen markets this
bad since 1972.
Further, they expect this to last at least 9 months and as long as 3
years. They based this on the fact that China, one of the main
consumers of recycled paper, have warehouses full of raw material; have
ships floating at sea loaded with containers of raw materials; and
finished roll stock stacked in warehouses as well so they are backlogged
on sales of finished goods ? backing up the entire supply chain.
Our sources told us that at best, if markets were corrected today, it
would be at least six months to eliminate the backlog of finished goods
once orders were placed, shipping commenced and the plants were back to
100% utilization of raw materials.
Sources also stated that mixed waste is nearing $ 0.00 value and with the
cost of curbside collection and processing the commingled materials, it
may start seeing the landfill for disposal instead of being stock piled
for later sale ? something that will not bode well with many.
Principal & V.P. Business Solutions
WIH Resource Group
Environmental & Logistical SolutionsTM
Phone: 480.241.9994 ~ Fax: 623.505.2634
mailto:GreenYes@no.address] On Behalf Of David
Sent: Friday, October 31, 2008 5:54 AM
Subject: [GreenYes] Markets Tanking
I?d like to get a discussion started here about the state of the markets
and what others are seeing in their regions.
I don?t know about any of you, but we are now dealing with a set of
commodities markets that have fallen through the floor. Cardboard has
dropped by more than 50%, office paper and commingled containers are way
down, scrap steel we are hearing has dropped by 80-90%. I?m planning on
doing a systematic call to all of our main markets to get a pulse and
solid numbers beginning next week.
This is an acute problem here in the Mid-Atlantic and obviously no one
knows how long we?re going to be struggling with this situation. What it
means for my member companies is that they won?t be seeing rebate checks
for a while and they may well start having to pay more for recycling
My biggest concern is for businesses just now trying to put programs in
place. They?re going to take a look at the economic equation of shifting
over to recycling and have a hard time understanding why they should be
recycling. In the case of our big haulers its very likely that they?re
now going to be uninterested in working with small and medium accounts to
put recycling in place no doubt they are losing money on dumpster
service systems where they just charge a flat monthly fee for recycling.
I?m not panicking here. I understand that this is a long-term game. We?ve
seen this before in the early 90s. I?m going to be working on getting the
word out to the business community on the need to do proper long-term
economic analysis and to work things through on a group level (we?ve
formed a partnership with IRN and are offering cooperative marketing
services now to our members).
This is potentially very serious, though. The zest for ?green programs?
is meeting the realities of the market economy and I dare say folks are
going to lose interest at least in recycling if we don?t figure out how
to help them properly. We?ve come too far to let things slip like they
did in the 90s.
David Biddle, Executive Director
Greater Philadelphia Commercial Recycling Council
P.O. Box 4037
Philadelphia, PA 19118
Gary Liss & Associates
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