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[GreenYes] Re: market downturn

Single stream is not the big bad monster here folks.  As Biddle said in his last email, there are different qualities of single stream out there.  The key is the technology and how many tons an hour you run through it.  

In the early history of SS, the markets did not enforce or reward quality, thus the MRF's didn't get the pricing feedback that said "clean it up stupid"... instead, the world has been buying everything at an increasing price!!!   Because the collection cost savings are real (and this is the most expensive part of the ZW system), and because less trucking equals less GHG, the technology for automated sorting of mixed recyclables just keeps on getting better.  And that is good, because hand sorting recyclables is not a great job.  So, we're at the point now that if you run the SS technology really sloooowwwwllllyyyyy, then you can get a really good quality sorting job done and the mills will love the quality of the stuff.   But if you run the system too slowly, then your throughput rate is too low, and you won't make any money.   Thus, the conflict over who is going to make any money ... the MRF's or the Mills?  Because I've been told by a big name expert on paper mills (Bill Moore) that the new cleaning screens on the new mills in Asia are much much better than ours here domestically and they CAN clean up the dirtier SS fibers they are getting.  Proof of that is the increasing price and demand for fiber over the last five years while quality declined!!

I am not advocating dirtier recyclables, but I am saying that single stream collections is a key piece of transforming our world into a 3-Bin Discard Collection World, thus putting a stake through the heart of the 1-Bin Trash World... and if we win this single battle of creating a "source separated world",  then we will also have killed the economics of landfilling and burning. 

The real issue before us now is to understand why China was able to bring us all to our knees like this?  One reason is because we have let our domestic recycling industry die, and the only way we will fix that is to create bigger markets here at home for recovered resources.  The way to do that is called "national minimum content standards" for everything manufactured or imported into the US.   The NRC discussed this in 1994, but when the markets exploded in 1995 and suddenly the recycling business was profitable... well ... we all just went to work.   But NOW is the time to bring this issue back... even if Chindia (China and India) are going to keep buying everything we throw away, we should still be looking local and using our discards ourselves.


From: "Helen Spiegelman" <hspie@no.address>
Sent: Friday, November 14, 2008 3:40 PM
To: "greenyes greenyes" <greenyes@no.address>
Subject: [GreenYes] Re: market downturn

Hi all ~

I share Amy's concerns. Here in Vancouver (CANADA) we are trying to head off a shift to single-stream. See a recent post to our Zero Waste Blog on the issue.

Helen Spiegelman
Zero Waste Vancouver

At 02:16 PM 11/14/2008, Amy Perlmutter 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
Strategic planning, partnership building, communications, and program design for a sustainable future

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