Title: [GreenYes] Re: market downturn
The feedback I've gotten from folks in the industry (Eric I'm still
learning) is that the problem they
(processor's) have is getting non-contaminated recyclable material,
and that in general they have a
loss of 40% of the stuff that is shipped to them- which they then send
back into landfills.
The second, related problem is the one Eric mentions about the age old
challenge of quantity vs. quality and
the cost of recovering the materials.
Any thoughts on how you recover the materials earlier in the process
(three bins vs. one) and still modify
human behavior to "want" to recycle? Take a look at Recycle Bank's
approach, I'd be interested in
your thoughts and comments.
link: http://www.recyclebank.com/
On Nov 14, 5:16 pm, Amy Perlmutter <a...@no.address> wrote:
> I just saw this in NRC"s e-newsletter. I was surprised about the 2nd
> point under 'what to do.' I would think that the quality of material
> from single stream programs would make those materials harder to
> market at times like this. Thoughts?
>
> Georgia Recycling Coalition Releases Advisory on Impact of Commodity
> Values on Recycling Programs
>
> Earlier this week NRC Affiliate, the Georgia Recycling Coalition
> (GRC), in conjunction with the Georgia Department of Community Affairs
> and several industry representatives, released an informative
> advisory and analysis summarizing the factors that influenced the
> recent drop in recycling commodity values along with a set
> recommendations for “weathering the storm”:
>
> • Market prices for recycled commodities were at historic,
> unsustainable highs – this market correction was expected but
> exacerbated by the world wide credit crisis and global recession.
> • The number of recycling programs in the country has grown, thus
> increasing the overall supply of recovered materials.
> • As the economy slows the manufacture and sale of new products has
> slowed thus lowering the demand for paper products and other
> recyclable materials.
> • Asian markets may have over reacted to the Financial Market crisis
> by ceasing paper and other recyclable commodity imports.
> • When the Asian markets ceased imports, a significant “new” sup ply
> of recyclable materials was available in the U.S.; however with a
> sluggish economy demand for the existing supply of recyclables was
> already slowing.
> • Demand for recyclables, although reduced in a sluggish economy, will
> continue; however they will be more localized to the end markets using
> the materials – transportation is a major factor impacting the market
> price of recyclable commodities. (In the long run, this may make
> recycling more sustainable by linking where materials are collected to
> the users)
> • Lower oil prices have had an impact on recycled plastic commodity
> prices but may ease the need for recyclable revenues needed to offset
> high fuel prices for recyclable collection.
>
> Impact to local governments – what to do….
>
> • Don’t over react! Just like the financial markets, now is not the
> time to sell. Need to stay in the “market” for the long-haul. Markets
> are cyclical – the cost to restart versus maintaining a recycling
> collection program during a sluggish recyclable market is significant
> and should be considered carefully.
>
> • Minimize collection costs. The collection and transportation of
> recyclables are a major cost of recycling. Single-stream collection
> programs will minimize collection costs and as market values drop,
> single stream collection programs will continue to off-set time,
> labor, and cost intensive manual source separated collection programs.
>
> • Minimize processing costs. Identify stable; efficient recycling
> processors. Automated, efficient processing recycling centers will be
> key in lowering processing costs while still maintaining a degree of
> high quality of materials for end markets.
>
> • Some local companies may look at this as a feasible time to make
> upgrades to facilities in order to streamline their operations toward
> higher efficiency; this should be construed to be a positive move
> toward future operations, although it may seem inconvenient for the
> short term
> • Hold the course:
> - Recyclables delivered to local end users support local business,
> jobs, and economies;
> - Recycling conserves water and energy, resulting in manufacturing
> savings thus building stronger local economies;
> - Recycling is a strong component of any livable/sustainable community
> index; and
> - The cost to process recyclables is typically less expensive than
> disposal costs.
> • Consider short-term collection contracts. If you are considering, or
> have a long-term contract, include or add a provision to share in
> commodity processing costs and/or revenues depending upon the market
> conditions; understanding that recyclable collection is a service many
> residents want or have come to expect in their community.
>
> • Remember, commodity prices are subject to supply and demand. Market
> prices have been at an all time high for the past few years, when
> making decisions on program changes look at a three-year (3) average
> (at a minimum) of market prices before conceding to renegotiate
> revenue sharing contracts or modifying a recycling collection program.
>
> Amy Perlmutter
> Perlmutter Associates
> 23 Avon Street
> Cambridge, MA 02138
> 617-354-5456
> Strategic planning, partnership building, communications, and program
> design for a sustainable future
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