The Recyclables market collapsed. This article is all about recycling business recovery and how recycling works.

Last August, when talks about recession was just getting to fever pitch, we wrote an article about starting a recycling business from home, and a lot of people responded positively. In November, however, the recyclables market collapsed, literally overnight. Recycling as a lifestyle continues to be a viable environmental option, though at this time, it may not be a sound idea to start a home-based recycling business. The industry, cyclical by nature, is experiencing a low point, and the global financial crisis is making it worse.

Credit crunch and glut of materials

After the financial meltdown last September, consumer demand slowed down considerably worldwide. China, the biggest importer of recyclables, shelved plans to start three major recyclables processing plants and all but halted importation of recyclables from the US and elsewhere. With the over-abundance of warehoused materials intended for those centers, prices plummeted to their lowest levels since the seventies.

“We’re getting brutalized,” said Jerry Powell, editor of Resource Recycling, a monthly magazine based in Portland, Ore. “It’s the steepest and fastest decline we’ve seen.”

Prices dropped so precipitously and in a very short span of time, forcing some cities and counties here in the US to suspend hauling recyclables, for the time being. Rebates from recycling centers, significant income to some local governments, either got reduced drastically or vanished altogether. Some recycling centers even started collecting fees for processing recyclables.

The most affected by the price decline are materials that are known as “single-stream” recyclables. This includes paper and plastic, compacted and bundled into 60,000 lbs. blocks, that are shipped directly to places like China. This is a very efficient method since it requires little to no sorting at home, and very fast processing at the materials recovery facilities. Prices plummeted from $18 per ton to zero.

Watch: How Single Stream Recycling Works

Most city administrators, however, still consider recycling as a much viable alternative to bringing materials to landfills. The reasoning here is that even if some recycling centers have started collecting fees from some counties and cities, it still costs cheaper than $40-$80 the city would have to pay to deposit materials to the landfills.

Stockpiling Recyclables

What’s happening right now is that recyclers are warehousing recyclables and waiting for the inevitable recycling business recovery to take place. That’s why it’s bad timing to haul recyclables on a home-based scale, at present. You have to have a lot of warehousing space and stamina to wait for at least 6 months for the market to hopefully rebound. As in any market, there are sub-niches that you might want to explore that seem to be unaffected by the market drop. Glass recyclables in the US remains basically the same, while prices for aluminum cans have been reduced by only a relatively smaller percentage . Used cell phones prices, too, have remained constant. Check out Pacebutler’s used cell phone purchase prices here.

Recycling, as a concept, has undergone tremendous acceptance in the last three decades, and many people today consider it a basic part of their modern lifestyle. Some of us who reside in cities and counties, where the local environmental agencies have suspended collection of recyclables, may just have to wait for the resumption of services, and just store our recyclables.

Kids who just won’t take ‘no recycling’ for an answer

Or perhaps, we can take inspiration from these second-graders at Ruthlawn Elementary in South Charleston, W. Va. These kids simply refused to take “no recycling” for an answer. What happened was that they were so enthusiastic about recycling and when they learned that the county was planning to stop collection altogether, they took action. They wrote letters to the mayor and governor, asking that recycling collection be continued. They got what they wanted. The county actually found ways to sustain the collection of recyclables.

Kids in this country are wonderful. I just remembered, when I wrote the story about cell phone recycling and cleft palates, those were also kids from Contra Costa county who conducted that cell phone fund raising drive for Smile Train.

“We expect the market will eventually turn around.”

Industry veterans recognize this plunge for what it is – the down part of the market cycle. While it is uncertain as to when prices would start picking up again, everyone agrees, the market will eventually recover.

Melissa Kolwaite of Waste Management recycling center in Denver remains optimistic about the industry.

We’ve seen this before and we’ll see it again; it’s just part of the industry,” she said. “We expect the market will eventually turn around.

Whatever happens, we are in this for the long haul.

Eric Melaro of the South Carolina Department of Health and Environmental Control  echoes this optimism:

The recycling industry is still strong in South Carolina and across the country.

We’re at a low point, a very low point. But it’s not expected that there will be further decreases.

So, let’s continue recycling where we can. Store recyclables if your city has stopped collecting these at the moment.  If you’re planning to go into business as a hauler, you might want to wait a little bit. But as in the stock market, the best time to buy is when the prices are down. If you have a large warehousing capacity, you might want to start stockpiling. Recovery for the beleaguered recycling business might just be around the corner.

Sources and Resources:

• Loveland Connection – article “Recycling In Its Slowdown” by Kevin Dugan