The Price of Recyclables

  • Mark Murray, with the nonprofit Californians Against Waste, says that in the space of one month, October 2008, the price for mixed paper on the global market plunged from $100 a ton to less than $30. (Photo by Erin Kelly)

If you want to get a sense of how the overall economy is doing, look outside your window the night before garbage and recycling day. Last fall, you’d have seen trucks full of cardboard circling the neighborhood. By winter, the cardboard poachers had disappeared. That’s because wastepaper – like other recyclables – feeds into a multi-billion dollar global commodities market that rises and falls just like housing prices and stocks. Amy Standen has more:

Transcript

If you want to get a sense of how the overall economy is doing, look outside your window the night before garbage and recycling day. Last fall, you’d have seen trucks full of cardboard circling the neighborhood. By winter, the cardboard poachers had disappeared. That’s because wastepaper – like other recyclables – feeds into a multi-billion dollar global commodities market that rises and falls just like housing prices and stocks. Amy Standen has more:

Last winter, Carolyn Almquist had a problem. Carolyn’s in charge of exports for APL transportation in Oakland, California. It’s her job to move shipping containers full of American exports, like wastepaper, to factories over in Asia. The problem was, the factories in Asia didn’t want them.

“There was no buyer. It would arrive at our terminal, say, in Jakarta, and no one would pick it up.”

Asian paper mills were canceling deals with the ships halfway across the Pacific. And Carolyn – who’s in charge of APL’s exports – was the first to hear about it.

“I’m getting an email saying, ‘what are you people doing? Don’t send stuff without a buyer.’”

Waste paper is the country’s number one export, by volume, so when prices fall, it’s not just Carolyn who’s in trouble.

“Hey, Alex, good morning! Steve Moore calling.”

Steve runs a company called Pacific Rim Recycling, 40 miles north of San Francisco.

“Got any updates for me on the marketplace?”

Every day, he calls around to see how much people are paying for things like newspaper, water bottles, old envelopes.

“What about corrugated?”

Most of our recycled cardboard, and a lot of our plastic ends up at Asian factories where it’s turned into iPhone boxes, polyester shirts, that are then shipped right back to the US market.

Until, that is, we stop shopping.

“When people stop buying those goods and products – the VCRS and the TVs from China – there’s no need for the boxes to go around them.”

That’s Mark Murray, with the nonprofit Californians Against Waste. He says that in the space of one month, October 2008, the price for mixed paper on the global market plunged from $100 a ton to less than $30. In two months, plastic water bottles dropped from $500 a ton, to less than $100.

“What recycling experienced in the last six months is really the same thing the entire global economy has been experiencing.”

So, when the economy falters, recyclers suffer. Some shut down entirely. Others were forced to simply dump unsellable paper into local landfills.

Steve Moore hunkered down to wait it out.

“We couldn’t sell anything for six weeks. All this material was backing up, I had to rent space next door. I had to sell it at $10 a ton, just to get rid of it.”

By February, prices had started to recover, as demand for consumer goods began picking up a bit – but they’re no where near the highs of a year ago.

“And a ton of paper today is worth $100 a ton. Last year, it was worth $200 a ton. It’s a very volatile market, so the economics of that are pretty severe.”

One reason the market’s so volatile is that with recyclables, the supply never stops. No matter how much or how little those Asian factories want our cardboard and our plastic water bottles, we are going to keep putting them out on the sidewalk.

Oil manufacturers can turn down the spigot when demand drops, to control supply so it keeps pace with demand. But bales of paper and plastic just take up too much space. And here at Pacific Rim recycling, the trucks keep rolling in.

(sound of bottles and cans at Pacific Rim)

“The volume of this material is huge!”

But at least it’s moving. Prices for our recyclables might be lower than their peak a year ago, but Steve Moore can relax again.

And, over at the Port of Oakland, Carolyn’s no longer getting angry emails.

“Things are picking up again. Financing has freed up. The banks are a little less nervous, If we had a ship here today, she’s be sailing Oakland full. Life is a little bit easier.”

And Carolyn Almquist knows as well as anyone in this industry to enjoy it while it lasts.

For The Environment Report, I’m Amy Standen.

Related Links

Recycling Prices Down in the Dumps

  • (Photo by Julie Grant)

The recycling industry is the
latest to take a hit from the world’s
economic problems. Rebecca Williams
has more:

Transcript

The recycling industry is the
latest to take a hit from the world’s
economic problems. Rebecca Williams
has more:

The bottom has dropped out of most commodity markets: recycled paper,
metals, everything. It’s tied to the collapse of economies worldwide.

Tom Watson is with the National Waste Prevention Coalition. He says
recycling companies’ profits are way down.

“A lot of it is connected with China – and the demand for fewer products
there so they need less of the recycled materials for the packaging.”

Watson says China is buying a lot less of our recycled paper and cardboard
to make packaging, because we’re all buying a lot fewer products from
China.

That means recyclables are stacking up in a lot of places. Recyclers are
starting to talk about charging garbage companies to drop stuff off. And that
might mean we’ll be paying higher trash bills.

For The Environment Report, I’m Rebecca Williams.

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