Share This Page

Prices plummet for recycled materials

Even the scrap business is down and out these days.

Fallout from the credit crisis is affecting scrap yards and recycling centers, where prices for copper, steel, aluminum, newspapers and cardboard have dropped dramatically. Recycled goods fetch, on average, about 75 percent less than they did in August -- if buyers can be found.

"It's just further testimony of how interconnected everything is in the world economy," said John Frederick, director of Professional Recyclers of Pennsylvania, a trade organization based in Blair County with 625 members.

Particularly hard hit are large businesses that ship plastics and cardboard to Asia, where the materials are reconfigured into packaging materials for which demand falls when consumer sales slump.

Some recyclers are hoarding much of what they collect, industry officials say.

"There's a limit as to how much can be hoarded," Frederick said. "If your 401(k) loses value, you can just wait for it to go up again. But there's only so much cardboard and scrap metal anyone can hold onto."

Tom Adamek, general manger of Green Star North America on Neville Island, the region's largest recycling company and one that has a contract with the city of Pittsburgh, said his company is storing some of what it collects.

Prices fell at the end of October, Adamek said. "This is the biggest slowdown since back after 9/11."

Recycled newspaper sells for $60 per ton, compared with $175 per ton in the summer. The value of tin dropped from $510 per ton to $50 per ton. And cardboard, which sold for about $80 per ton, is worth almost nothing.

Although scrap and recycling companies are accustomed to sharp and frequent price fluctuations, the recent drop is the most dramatic in years. Company officials worry there's no turnaround ahead.

"I have seen ups and downs. This is the worst I have ever seen. Prices have come down so fast," said Marcus Power, assistant manager at AAA Scrap Iron and Metal in the Strip District, in business since 1927. The company sells most of the metal it buys to steel mills.

Bill Pack, sales manager at Pittsburgh Recycling Service in Hazelwood, another large recycler whose clients include Alcoa and Washington Hospital, said it's difficult to offset costs.

"Right now, we are just counting on this not going on forever," he said.

A prolonged price slump could affect municipalities that rely on revenue from recycled goods, said Dave Mazza, Western Pennsylvania director for the Pennsylvania Resources Council, an environmental advocacy group founded in 1939.

"A municipality could be in trouble if they are counting on this money. They may either get much less back or see their collection rates go up," he said.

The city of Pittsburgh receives about $500,000 for recycled goods each year, an amount unlikely to change until its contract ends in 2010, said Sean Wigle, the city's recycling coordinator.

"We are trying to make the city's recycling pay for itself," he said.

Recycling is mandated by state law in communities with more than 5,000 residents. Some communities, such as Cranberry, opt to get nothing in exchange for the value of recyclables.

"If you are going to share the profit, you share the risk and then may face higher rates," said Lorin Meeder, Cranberry's environmental programs coordinator.

Some in the recycling business say the price bust is the result of overreaction and panic.

"It will rebound. China is shut down right now; there are boats sitting in the water there. But the prices of all of these things, paper, aluminum and glass, always fluctuates," said Bob Shea, area manager for AbitibiBowater, which operates 1,407 PaperRetriever bins in Southwestern Pennsylvania.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.