Recycling industry not recession-proof

December 2, 2008 7:32:17 PM PST
You might think at least garbage is recession proof, but no. Now the ripple effect of the economic slowdown is reaching into your recycling bin. In this Assignment 7 report, we look at how a worldwide downturn in the market for used paper, metal and plastic is creating a tough situation for Bay Area recyclers.

Day after day, trucks dump their loads at recycling facilities all over the Bay Area. The material is sorted, then sold to be made into other products. But in the last few months the demand for recycled items has dropped dramatically.

"These are tin can bails, so ferrous metal cans, soup cans, juice cans, that kind of can. And three months ago it was selling for $280 a ton and today it sells for zero. I can't find a buyer," said Steve Moore who runs Pacific Rim Recycling in Benicia.

And when buyers are available, the prices are often too low for recyclers to make a profit.

"The amount of change in our revenue stream is dramatic and the impact is layoffs, wage cuts, and possible foreclosures of facilities," said Moore.

According to The Brown Sheet, a newsletter that tracks paper recycling prices, last August West coast recyclers could sell a load of mixed paper for $120 to $135 a ton. Now it is going for just $10 to $25 a ton.

"The market for recyclables is -- it's down in the dumps... pun intended," said Paul Morsen of the Central Contra Costa Solid Waste Authority. All joking aside, he says the situation is extremely serious. "This is a nationwide problem, indeed this is a worldwide problem."

The bottom line is California is doing a great job collecting recycling, but not such a great job using the material.

Most of our recycling actually gets shipped to China and other Asian countries. They use the recycled material to make products, then they ship them back to the United States to be sold.

Now, with the world economy in a tailspin, those products are not selling as fast. So manufacturing is slowing down and therefore there is not as much need for recycled material.

Bay Area officials are quick to point out this does not mean you should stop recycling.

"That's necessary, indeed the state requires us to divert 50 percent of our materials from the landfills and so we want to continue to do that," said Morsen.

The environmental group Californians Against Waste says the current market crisis is a wakeup call to find recycling alternatives closer to home.

"We need to do more to develop markets for recyclable material here in California, increased manufacturing capacity, increased utilization of this material, so that we are not dependent on those foreign markets," said Mark Murray with Californians Against Waste.

If the low prices in the recycling market continue more than just a few months, it is likely we will see an increase in the recycling fees included on most Bay Area garbage bills.

Written and produced by Jennifer Olney.


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