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A NEWSLETTER TO EXPAND MARKETS FOR RECYCLED MATERIALS

Surviving the ups and downs of the recycled materials markets

Glacier Recycle’s John Yeasting (right) gives King County and Seattle Public Utilities employees a tour of the company’s Auburn construction and demolition debris processing facility. Yeasting reports that the current market for recycled materials is the worst he has seen.

During this time of worldwide recession, most commodity prices are in decline. However, prices for materials recovered through community recycling programs have taken an even bigger hit. Businesses in King County that collect and process these materials are feeling the impact of this sudden downturn in prices.

Over the past decade, the volume of materials recovered through local recycling programs has grown exponentially. Most communities in industrialized parts of the world have adopted recycling programs. Here in King County we recycle an estimated 45 percent of our waste.

In mid-2008, the prices received for recovered materials—including paper, plastic, glass, aluminum and tin—began to plummet, causing communities and businesses to scramble to figure out what to do with the materials coming into the system. Recovered paper brokers in the U.S. have been seeking storage space for paper that has no buyers while Great Britain is strongly advising local authorities in England to not attempt to store recovered materials until prices rebound due to the costs of temporary storage and transportation to and from those storage sites.

Recovery and recycling of household waste is not a system that can just be turned on and off. LinkUp talked with several of its local partners and a leading national expert about the current situation and how to weather the changes.

Here at home
According to Craig Lorch of local recycling company Total Reclaim, while things are not good, they could be worse. He has seen dramatic price decreases for the markets he sells into, but he has not seen the markets stop buying. That means he is able to keep moving the plastics, metals and other materials that his business recovers.

“Operations whose business models are built on the value of the scrap they collect will have a hard time surviving this market,” Lorch said. “Recycling businesses that charge for service as we do will be much more insulated from market swings.”

John Yeasting of Glacier Recycle, a construction and demolition debris recycling company, reports that this is the worst market he has seen in his career. Metals, plastics and cardboard have all had huge downturns in prices. In the case of metals, the price has fallen 95 percent from where it was a year ago.

For Glacier, the saving grace has been their focus on wood. Because of the diverse forest products industry in Washington state, prices for recovered wood have remained relatively stable. Biomass and wood pulp as an alternate fiber source for paper products are the two markets driving this stability.

In terms of advice for other firms struggling with these market conditions, Yeasting says to control quality as well as possible.

“You don’t want to give the market an excuse to not take your material,” he said. In addition, Yeasting recommends that you “keep the materials moving, even if for free. Stockpiles will just cause more problems for your business down the line.”

Global markets
For an international perspective on price volatility and what can be done to help stabilize prices for recovered materials, we talked with David Dougherty, an international expert on recycling markets. According to Dougherty, the greater volatility for recovered materials stems from the fact that the markets are still relatively immature. They lack diversification and consequently, these commodities are thinly traded.

For example, mature commodities typically have a primary and secondary market. When the primary market is unable to use the entire commodity available at a given time, the price falls 10 to 20 percent, and then the secondary market will find the price attractive and begin buying.

In the case of most recovered materials, however, there are no secondary markets. When the primary market isn’t buying, prices go into a free fall. While the industry will never be able to stabilize the markets, there are steps the industry can take to stabilize the prices.

Industry experts say that in the long term, there must be more diversified markets with secondary and tertiary purchasers of recovered materials, similar to most other commodities markets. Local, state and national programs must continue to pursue new and alternative uses for materials such as paper, plastic, glass and rubber.

More immediately, Mr. Dougherty believes that members of the recycling community must move forward with plans to develop an organized market mechanism that allows collectors and manufacturers to enter into contracts that guarantee future delivery at set prices. Such contracts will not curb the swings in demand for materials, but will lessen the price swings.

King County focus

New law allows businesses to drop off old electronics for free recycling
As of January, small businesses have a place to recycle old computers and other electronics for free. E-Cycle Washington is a new statewide electronics recycling program that transfers the cost of recycling from consumers to manufacturers. King County was involved in helping the state craft this new law with many of its elements modeled after King County’s successful Take It Back Network program.

Small businesses — defined as having less than 50 employees company-wide — plus households, school districts, small governments and charities are now able to drop off computers, monitors, laptops and TVs to designated sites. “Many Take It Back Network members are participating in E-Cycle Washington and will accept TVs, computers, and monitors at no charge,” said Lisa Sepanski of the King County Solid Waste Division. “Small businesses in King County and throughout the state now have the opportunity to easily recycle these materials at no charge.”

While the law does not set a limit on the amount of electronics recycled, many collection sites have a limit on what they can accept per day. Small businesses should call ahead to the site if they are bringing a large amount of items to be recycled. For business with over 50 employees, the responsibility of recycling electronics continues to fall on the company.

Processors that participate in E-Cycle Washington adhere to the state’s preferred processing standards to ensure proper disposal of the electronics. In addition to following environmental standards set by the state, companies are also required to document and report their end distributors.

“E-Cycle Washington is a convenient way for small businesses, consumers and others to responsibly dispose of unwanted electronics,” said John Friedrick, director of the Washington Materials Management and Financing Authority, the manufacturer-funded group that operates the program. “Washington’s manufacturers have taken responsibility for making sure these materials are recycled in a way that keeps toxic materials out of our environment.”

E-Cycle Washington was made possible in 2006 when Washington passed a law shifting responsibility to electronics manufacturers for the recycling of computers and TVs. In requiring producers to cover the cost and management of recycling, the law provides an incentive for manufacturers to reduce the use of harmful materials, as they will ultimately have to pay for their disposal.

E-Cycle Washington is a partnership between public and private sector members: electronics manufacturers, the Washington State Department of Ecology, local governments, retailers of electronics and non-profit organizations.

To find a collection site near you, visit the E-Cycle Washington Website.

Industry Voice

Grays Harbor Paper prides itself on superior sustainability practices in paper manufacturing. The mill is carbon-neutral but still striving to make advances in production as they grow and expand.

Interview with David Quigg, Director of Marketing at Grays Harbor Paper.

Q: What makes Grays Harbor Paper unique in terms of sustainability?

A: Grays Harbor Paper paper is one of the only paper mills that make 100 percent post-consumer product for all printing grades. Many mills have their own forest lands so it’s not as beneficial for them to make the recycled products. For us, sustainable practices that benefit the environment also benefit our business. We are also one of only a few mills that is using wood pulp made from recycled urban wood in some of our paper products. We strive to be as efficient as possible in everything we do—we make our own steam out of bio-mass wood waste (the remaining wood product that would otherwise be burned on site or go to a landfill—wood of zero value). We put the bio-mass in a boiler with emissions control which makes steam to dry the paper. We also use turbine generators that run on the same steam to make up to 18 mega-watts of power which is used to make our recycled papers, but is also available for Puget Sound Energy for customers in the Seattle area.

Another way we have been sustainable is by re-opening a pre-existing paper facility that was closed instead of building something new. We were also able to restore jobs to support the local community.

Q: How long has Grays Harbor Paper been carbon-neutral and what inspired the company to strive for that?

A: Since 1993 when we re-opened the paper mill we constantly work to keep the business as cost-effective as possible and also to make sustainable products the best they can be. We want to walk the walk. We’re a local company that’s family-owned. We enjoy living in Grays Harbor and we want to keep that community clean.

We keep continuing to improve our processes to become even better. Two years ago we started using biodiesel waste fuel in the boiler instead of using crude oil. Changes like that make a difference to our bottom line, and to help the environment.

Q: How does the Grays Harbor Paper’s manufacturing process differ from that of the average paper processing facility?

A: We are leading the industry in two important ways. First we use entirely post-consumer material in our 100 percent recycled product. This is not standard for the industry. In addition, we make products that use wood pulp from recycled urban wood collected in the Puget Sound region. This is providing a new market opportunity for wood that comes from construction and demolition projects. Currently, most clean wood waste is burned or ends up in the landfill.

Our mill is also unique because we want to help people cut back on paper waste. It’s a valuable resource and we don’t want people to waste it, especially in today’s economy. Everyone uses paper and most people want to become more sustainable—our mill is trying to make that easy for people.

Q: What future aspirations does Grays Harbor Paper have for continuing to improve environmental practices in paper manufacturing?

A: We want to close the loop. We don’t have a pulp mill; right now we buy our pulp on the open market. We’d like to put a recycled pulp mill that is fully sustainable complete with biodiesel trucks to pick up and deliver recycled paper. We would make the paper, deliver the paper, pick it up and do it all again! We already have the engineering for the pulp mill and the blueprints and as sales increase we intend to take that next step. We also want to work with more organizations and businesses sharing the information we have been gathering over the last few years to help them cut back on paper waste and become more sustainable cutting their carbon footprint.

Fast facts

2008 commodity prices chart

Recycled material commodity prices show a dramatic downturn in 2008. The relatively high price-per-ton for metals, achieved in June/July, fell over $500/ton by the end of the year.

Source:AMM Recycling Manager

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