Leader Blues

Tuesday, December 16, 2008

TOP STORY > >Local recyclers in it for the long haul

By NANCY DOCKTER and JOAN McCOY
Leader staff writers

To put it bluntly, the bottom has dropped out of the recycling industry, but don’t stop recyling.

Resale prices for aluminum, paper, plastic and assorted scrap metals have fallen so low that some dealers are stockpiling instead of selling in the hope that the market, which is known for ups and downs, will right itself.

But what does that mean for the faithful household recycler who sorts waste into bins for curbside pickup? Those in the recycling business, say nothing has changed – for now.

Even if it is not profitable right now to sell recyclable wastes, it would be even more costly to send it to a landfill. So until further notice, green-minded consumers should just keeping sorting, they say.

“Recycling is not a money-making project,” Jacksonville Mayor Tommy Swaim said last week. “It is not something we depend on for our budget. It is not just about what you make, but what you save in landfill costs and for the environment.”

Six months ago, local recyclers of cardboard, plastics, paper, and aluminum were enjoying a boom. With prices at a high, revenues were well over those for 2007.

“We had almost a 20 percent increase in 2008, and now, here we go, the bottom falls out,” said Jimmy Oakley, director of public works for the city of Jacksonville.

Before prices nose-dived in the last month, the city had reaped $100,000 from recyclable sales; last year’s sales totaled $80,000.

“Our (revenues) may drop by two thirds from the way it is sounding; that’s huge,” Oakley said.

Prices peaked last spring, with aluminum bringing $1.10 a pound, plastics 37 cents a pound, and cardboard $130 a ton. Late summer, prices began to slide but were still at a healthy level.

By late fall, as deflation was settling over world markets like a long winter freeze, local recyclers began to feel the chill. Last week, 37 cents per pound was the price quoted to Jacksonville for its aluminum.

Plastics are now going for 15 cents a pound, and cardboard has crashed to $15 per ton, a near 90 percent drop from its spring price. Newsprint, the biggest product by volume collected, plunged from $135 to $35 per ton in recent weeks.

Oakley remembers when cardboard was at an all-time high five years ago of $200 per ton. He has never seen the price as low as it is now. “Right now, we are really sweating it; we may not even be able to get rid of it,” he said.

The city of Jacksonville has provided curbside recycling since 1993. Garbage, yard waste, and recycling pick-up and disposal cost the city about $1.1 million annually.

Through recycling, the city diverts about 1.2 million pounds of trash from the landfill, saving the city $15,000 in landfill charges annually.

RECYCLERS CONSIDER SURVIVAL STRATEGIES

Oakley said it is too soon to say how the plunge in prices will affect recycling collections or sales. For now, both continue. The city’s free service to a few large industries to pick up their discarded cardboard may prove to be too costly. A fee may be charged to cover costs.

“Or we may ask businesses to bring it too us,” Oakley said. “We’ll need to find ways to run a little leaner.”

Predictions are that it will be well into 2009 before prices improve.

“We’re in for a very long cold winter; it will be Labor Day before it gets better,” says Martha Treece, who has been a broker in recyclables for a decade.

Treece and her husband, Bill, own ORE Recovered Materials, based in Clinton. They buy recyclables from Jacksonville and other municipal recyclers across Arkansas. Products are then sold to U.S. manufacturers or go on the international market.

From her global vantage point, Treece saw the impending crisis before it hit the local level. Several weeks ago, she called an emergency meeting of the board of the Arkansas Recycling Coalition, on which she serves, to come up with a plan to help small community recyclers. The first of a series of educational meetings for coalition members around the state was held in Arkadelphia last week to propose ways to weather the tough times.

She advised recyclers to scrutinize efficiencies and costs, and rely more on volunteers.

Kendrick Ketchum, owner of Service Recycling, the Heber Springs business that collects and sells recyclables picked up in Cabot, said prices for paper usually fall around this time of the year because the demand is not as high. Recycled paper is used for Christmas paper, boxes and bags, and those are already in the stores. But the severe drop in prices a few weeks ago can be attributed in great part to China, he said.

“The thing that is different with what’s happening now is that it was just all of a sudden. Just boom,” Ketchum said. “China’s not buying right now. “They overbought getting ready for the Olympics, and now they’re economy is doing what ours is and they’re just not buying.”

Indonesia was also a good customer, Ketchum said, but like China, it’s not buying now either.

Plastic? It’s made from oil, which is so cheap right now that it costs more to recycle old plastic than to make it new, Ketchum said.

Aluminum cans? Ketchum said they sold for 50 cents a pound all summer. Now they are down to 10 cents a pound.

Rusty Miller, an account manager with Waste Management, the company that picks up garbage and recyclables in Beebe, said the cereal boxes, junk mail and newspapers that are left in tubs on curbs in Beebe are warehoused in Little Rock because there is no market for it right now.

Miller said it’s not sent to Two Pine, the landfill the company owns, for several reasons: Waste Management’s contract with the city says those materials will be recycled, not buried. Recycling is the right thing to do for the environment. And Two Pine charges by the load, so for now, it’s cheaper to stockpile than to bury.

Mark Dewitt, with A. Tenen-baum Co. in North Little Rock, which purchases scrap metal of all kinds in several states, said the first three quarters 2008, he shipped 22 trailer-truck loads of aluminum cans a month to Alcoa where they are processed to make more aluminum cans. Now, he ships 10 to 12.

Michelle Gillham, a recycling coordinator with the Arkansas Department of Environmental Quality, said the Arkansas companies, cities and non-profit agencies that sell recyclables are a tight-knit group who keep each other posted about shifts in the market. And they will survive, she said, if they are able to hold expenses down during this slump and if they can educate the public about the importance of recycling.

“They need to let the public know recycling is a service,” she said. “And the public must look for materials with recycled content. If we’re not buying those, we’re not really recycling. The public creates the market for recyclables by buying those things made from recycled materials.”