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[GreenYes] Re: Markets Tanking

Title: Markets Tanking

Hi David:


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.


Best Regards,


Bob Wallace

Principal & V.P. Business Solutions

WIH Resource Group

Environmental & Logistical SolutionsTM

Phone:  480.241.9994 ~ Fax:  623.505.2634

E-mail:  bwallace@no.address




From: GreenYes@no.address [mailto:GreenYes@no.address] On Behalf Of David Biddle
Sent: Friday, October 31, 2008 5:54 AM
To: GreenYes
Subject: [GreenYes] Markets Tanking


Hey Folks-

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 services.

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.

Any thoughts?
David Biddle, Executive Director
Greater Philadelphia Commercial Recycling Council
P.O. Box 4037
Philadelphia, PA 19118

215-247-3090 (desk)
215-432-8225 (cell)


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