Recycling sites caught in grip of lower prices
Posted on Saturday, November 29, 2008
ROGERS — Materials prices, forced down by depressed economic conditions, have slashed the profits of community recycling centers, threatening projects paid for through their efforts.
The resale value of discarded plastic bottles, aluminum cans and junk mail tumbled drastically in the past three months, the centers’ directors said, down 75 percent to 80 percent from near-record levels throughout the summer.
“We’ve had fluctuations before, but never this drastic,” said Wally Sheldon, director of the Bella Vista chapter of AARP, which operates the city’s recycling center. “This bottoming out is pretty intense.”
The center, started in 1973, uses retired volunteers to cut overhead costs, providing profits from materials sales as grants to nonprofit and community organizations throughout Northwest Arkansas.
The center collected $ 384, 000 from selling sorted recycled materials in the first three quarters of 2008, compared with $ 248, 000 in all of 2007.
In previous years, the retirees donated $ 15, 000 to the city’s privately operated library, a figure they hope to double with the help of high summer profits.
Profits have slowed, and contributions will have to slow with them, Sheldon said.
The Rogers Recycling Center, run by the city’s Parks Department, has processed waste products since 1979. Proceeds from the center have paid for more than $ 2. 2 million of parks, playgrounds and community buildings throughout the city, parks director Rick Stocker said.
Manufacturers, who reuse the materials in products, now pay much less than they did a few months ago, and the center will likely generate just enough profit to remain operational as it prepares to move to a new facility in the spring, he said.
Cardboard, which sold for $ 120 per ton this summer, now sells for $ 20 per ton, recycling director Ron Brewer said. Polyethylene terephthalate, found in 2-liter bottles and peanut butter jars, dropped from $ 600 to $ 100 per ton. Aluminum cans, which earlier sold for 80 cents per pound, now sell for 20 cents per pound.
The drop prompted officials from the Benton County Solid Waste District to e-mail recycling directors, warning them of potential drops in profit.
A decline in new home construction reduced demand for items such as carpet made from recycled plastics, said Dennis Pierson, manager of Ozark Academy Industries in Gentry. Budget-stressed American consumers are buying fewer gadgets, lessening demand for plastics from manufacturing nations like China. Lower oil prices have made it more cost-efficient to make new plastic than to regenerate it from discarded bottles, Pierson said.
Crude oil prices fluctuated between $ 50 and $ 55 a barrel on the New York Mercantile Exchange this week, pausing after a fall of more than 60 percent from a record $ 147. 27 in mid-July, a plunge reflected in the price of recylables.
“When the barrel comes down real cheap, it’s more economical for some of these places to produce fresh new stuff than to recycle,” Pierson said. “It’s sort of like dominoes; everything depends on everybody.”
The high price of scrap metal and copper inspired thieves to swipe catalytic converters from cars and air-conditioning units from uninhabited houses this summer, but that has changed, too, he said. The center once collected $ 170 a ton for scrap metal; now it barely gets $ 10.
“We’re just piling it up inside and hoping that at the first of the year it will creep back up enough to cover the cost of the gas it takes to haul it to the scrap yard,” Pierson said.
Ozark Academy Industries, which helps student employees cover the cost of tuition at the city’s Seventh-day Adventist school, may have to reduce the current staff of 12 to balance its overhead costs. It stopped accepting plastic bottles and junk mail two weeks ago, when the cost of processing the materials exceeded the profit generated from their sale, Pierson said.
Brewer, the Rogers director, said recycling drop-offs also have slackened, likely because consumers are purchasing fewer heavily packaged items and cutting back on nonessentials such as soft drinks.
Last year, the center shipped 250, 000 tons of materials, he said. This year, it’s on track to ship less than 100, 000 tons.
“We’re not getting the amount we need,” Brewer said.
At the right price point, the center will benefit from slightly depressed prices, Stocker said. When materials were fetching high prices, larger businesses paid manufacturers like Bekaert Corp. to haul away recyclable materials like cardboard boxes, taking their contributions away from the Rogers center. “The big boys can’t afford to do that anymore,” Stocker said. “We’re hoping to get some of those customers back.” The drops will force centers to “take a long, hard look at man hours and productivity,” he said. But, even if profits fall, recycling efforts are still valuable as a public service. “Whatever we do out here, that doesn’t go into a landfill,” Stocker said. “Those things are worthy in and of themselves.”
To contact this reporter: eblad@arkansasonline. com
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