|America Is Exporting Its Recyclables|
|New York Times Coverage|
|LA Times Coverage|
Is it better to be sending California's recyclables to the Far East for processing and sale back into the United States, or to convert these materials into advanced biofuels and green power here at home? The market for the export of recyclables is in economic disarray and no environmental (emissions) standards exist for the work that is being done abroad.
CLICK HERE to view a CBS '60 Minutes" segment exposing what is happening to America's e-waste and the conditions under which waste materials from the United States are recycled in China. Click on "New York Times Coverage" (above, right) to learn about the status of the recycling industry in the United States, and click on the "LA Times Coverage" to read about the current recycling economy in California.
Back at Junk Value,
Recyclables Are Piling Up
‚ÄúWe never saw this coming,‚Äù said Johnny Gold, an official of the Newark Group, at the company‚Äôs plant in Salem, Mass.
The New York Times, December 7, 2008
Trash has crashed.
The economic downturn has decimated the market for recycled materials like cardboard, plastic, newspaper and metals. Across the country, this junk is accumulating by the ton in the yards and warehouses of recycling contractors, which are unable to find buyers or are unwilling to sell at rock-bottom prices.
Ordinarily the material would be turned into products like car parts, book covers and boxes for electronics. But with the slump in the scrap market, a trickle is starting to head for landfills instead of a second life.
"It's awful," said Briana Sternberg, education and outreach coordinator for Sedona Recycles, a nonprofit group in Arizona that recently stopped taking certain types of cardboard, like old cereal, rice and pasta boxes. There is no market for these, and the organization's quarter-acre yard is already packed fence to fence.
"Either it goes to landfill or it begins to cost us money," Ms. Sternberg said.
In West Virginia, an official of Kanawha County, which includes Charleston, the state capital, has called on residents to stockpile their own plastic and metals, which the county mostly stopped taking on Friday. In eastern Pennsylvania, the small town of Frackville recently suspended its recycling program when it became cheaper to dump than to recycle. In Montana, a recycler near Yellowstone National Park no longer takes anything but cardboard.
There are no signs yet of a nationwide abandonment of recycling programs. But industry executives say that after years of growth, the whole system is facing an abrupt slowdown.
Many large recyclers now say they are accumulating tons of material, either because they have contracts with big cities to continue to take the scrap or because they are banking on a price rebound in the next six months to a year.
"We're warehousing it and warehousing it and warehousing it," said Johnny Gold, senior vice president at the Newark Group, a company that has 13 recycling plants across the country. Mr. Gold said the industry had seen downturns before but not like this. "We never saw this coming."
The precipitous drop in prices for recyclables makes the stock market's performance seem almost enviable.
On the West Coast, for example, mixed paper is selling for $20 to $25 a ton, down from $105 in October, according to Official Board Markets, a newsletter that tracks paper prices. And recyclers say tin is worth about $5 a ton, down from $327 earlier this year. There is greater domestic demand for glass, so its price has not fallen as much.
This is a cyclical industry that has seen price swings before. The scrap market in general is closely tied to economic conditions because demand for some recyclables tracks closely with markets for new products. Cardboard, for instance, turns into the boxes that package electronics, rubber goes to shoe soles, and metal is made into auto parts.
One reason prices slid so rapidly this time is that demand from China, the biggest export market for recyclables from the United States, quickly dried up as the global economy slowed. China's influence is so great that in recent years recyclables have been worth much less in areas of the United States that lack easy access to ports that can ship there.
The downturn offers some insight into the forces behind the recycling boom of recent years. Environmentally conscious consumers have been able to pat themselves on the back and feel good about sorting their recycling and putting it on the curb. But most recycling programs have been driven as much by raw economics as by activism.
Cities and their contractors made recycling easy in part because there was money to be made. Businesses, too ‚Äî like grocery chains and other retailers ‚Äî have profited by recycling thousands of tons of materials like cardboard each month.
But the drop in prices has made the profits shrink, or even disappear, undermining one rationale for recycling programs and their costly infrastructure.
"Before, you could be green by being greedy," said Jim Wilcox, a professor at the Haas School of Business at the University of California, Berkeley. "Now you've really got to rely more on your notions of civic participation.
The impact of the downturn on individual recycling efforts varies. Most cities are keeping their recycling programs, in some cases because they are required by law, but also because the economics, while they have soured, still favor recycling over landfills.
In New York City, for instance, the city is getting paid $10 for a ton of paper, down from $50 or more before October, but it has no plans to cease recycling, said Robert Lange, the city's recycling director. In Boston, one of the hardest-hit markets, prices are down to $5 a ton, and the city expects it will soon have to pay to unload its paper. But city officials said that would still be better than paying $80 a ton to put it in a landfill.
Some small towns are refusing to recycle some material, particularly the less lucrative plastics and metals, and experts say more are likely to do so if the price slump persists.
Businesses and institutions face their own challenges and decisions. Harvard, for instance, sends mixed recyclables--including soda bottles and student newspapers--to a nearby recycling center that used to pay $10 a ton. In November, Harvard received two letters from the recycler, the first saying it would begin charging $10 a ton and the second saying the price had risen to $20.
"I haven't checked my mail today, but I hope there isn't another one in there," said Rob Gogan, the recycling and waste manager for the university's facilities division. He said he did not mind paying as long as the price was less than $87 a ton, the cost for trash disposal.
The collapse of the market is slowing the momentum of recycling overall, said Mark Arzoumanian, editor in chief of Official Board Markets. He said the problem would hurt individual recycling businesses, but also major retailers, like Wal-Mart Stores, that profit by selling refuse.
Mr. Arzoumanian said paper mills in China and the United States that had signed contracts requiring them to buy recycled paper were seeking wiggle room, invoking clauses that cover extraordinary circumstances. "They are declaring 'force majeure,' which is a phrase I'd never thought I'd hear in paper recycling," he said.
Mr. Arzoumanian and others said mills were also starting to become pickier about what they take in, rejecting cardboard and other products that they say are "contaminated" by plastic ties or other material.
The situation has also been rough on junk poachers ‚Äî people who made a profitable trade of picking off cardboard and other refuse from bins before the recycling trucks could get to it. Those poachers have shut their operations, said Michael Sangiacomo, chief executive of Norcal Waste Systems, a recycling and garbage company that serves Northern California.
"I knew it was really bad a few weeks ago when our guys showed up and the corrugated cardboard was still there," he said. "People started calling, saying 'You didn't pick up our cardboard,' and I said, 'We haven't picked up your cardboard for years.' "
The recycling slump has even provoked a protest of sorts. At Ruthlawn Elementary School in South Charleston, W.V., second-graders who began recycling at the school in September were told that the program might be discontinued. They chose to forgo recess and instead use the time to write letters to the governor and mayor, imploring them to keep recycling, Rachel Fisk, their teacher, said.
The students' pleas seem to have been heard; the city plans to start trucking the recyclables to Kentucky.
"They were telling them, 'We really don't care what you say about the economy. If you don't recycle, our planet will be dirty,'" Ms. Fisk said.
Click next below to go to the LA Times Coverage article.
Wastepaper market in the dumps
With Chinese demand -- and prices -- plunging, reclaimed cardboard that is normally exported by the ton stacks up in Southland warehouses.
Excerpted from the Los Angeles Times, December 9, 2008
Bales of shredded cardboard, paper and packaging are arranged into towers several stories high inside Steve Young's 130,000-square-foot warehouse in Commerce.
Trucks have been unloading 600 tons of the wastepaper each day for more than a week, leaving the cavernous building filled nearly to capacity. Ordinarily, much of the scrap would have been shipped to China, where it would be mashed into pulp and recycled into new cardboard boxes to package many of the goods destined for American store shelves.
But American consumers aren't buying so many nicely packaged televisions, computers and toys these days. And China's economy is slowing too.
So the stacks of paper in Young's warehouse are going nowhere. Prices for the material have plunged as much as 75% in the last six weeks and will probably struggle to rebound as demand continues to melt away.
Chinese manufacturers' dependence on scrap paper from the U.S. grew enormously over the last several years as environmental degradation and logging restrictions limited their ability to find raw material to make new paper.
Last year, 11 million tons of scrap paper worth $1.5 billion was exported to China. By contrast, only 1.1 million tons, worth $57 million, was exported to China in 1998, according to the U.S. International Trade Commission.
The decline of paper values has occurred too recently to be reflected in industrywide statistics, most of which go as far as September. But industry leaders say the drop-off has been painful and unprecedented.
"Prices have dropped so much that we don't know where they should be," said Jim Yang, president of Newport CH International in Brea. "A lot of material is going to the landfill and a lot is stacking up in warehouses in case prices go up again. It's just so volatile."
The California Integrated Waste Management Board is so concerned about the crisis that it has called a special meeting for Dec. 10 with officials and suppliers to discuss ways of easing the hardship and preventing businesses from closing.
One of the options being considered is waiving restrictions on how long suppliers can store waste material, so they can wait for competitive prices to return.
"A lot of our stakeholders are affected by this dramatic price drop-off," said Jon Myers, director of communications for the board. "It just happened so fast. Recycling has always been an up-and-down kind of market. We saw some big price increases the last couple of years, but we've never seen a big drop like this."