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[GreenYes] Re: market downturn

Title: [GreenYes] Re: market downturn

Some discussion of contamination and single stream here.

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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