Bottom Drops Out Of Recycling Industry?
When the economy isn’t going well, every single kind of business seems to suffer.
One consequence of the economic downturn may be one none of us think of immediately: the recycling industry.
What is usually a booming industry - based on selling recyclable materials - is officially in a free-fall, according to this article:
Just months after riding an incredible high, the recycling market has tanked almost in lockstep with the global economic meltdown. As consumer demand for autos, appliances and new homes dropped, so did the steel and pulp mills’ demand for scrap, paper and other recyclables.
Cardboard that sold for about $135 a ton in September is now going for $35 a ton. Plastic bottles have fallen from 25 cents to 2 cents a pound. Aluminum cans dropped nearly half to about 40 cents a pound, and scrap metal tumbled from $525 a gross ton to about $100.
What are the numbers?
Last year, Americans generated about 254 million tons of trash, according to the U.S. Environmental Protection Agency. They recycled about 150 million tons of material — roughly 80 million of that in iron and steel — supporting an industry that employs about 85,000 with $70 billion in sales, said Bob Garino, director of commodities at the Institute of Scrap Recycling Industries Inc., a Washington, D.C.-based trade association that represents more than 1,600 companies worldwide.
Most recyclables are shipped to Asian countries that use the material to make products that are shipped backed to the United States to be sold.
But the market shift is now jeopardizing hundreds of millions of dollars worth of long-term contracts for scrap metal as some companies that signed when prices were high are trying to cancel or postpone deliveries to take advantage of the cheaper spot market, Garino said.
Obviously, the concern is that all municipalities may cut back their recycling programs. At a time when recycling has become second nature to many Americans, it’s daunting to think that people perception of the the process could change.
So, what is the outlook?
According to the article, the market isn’t likely to bounce back until the economy improves. Some put estimates for this at several years. Others think the turnaround may come sooner than that.
“It’s just time to pull in your horns and maintain what you have and try to survive until 2010,” he said.
