Commingled Economies

By now we all know that the slowing global economy is affecting numerous markets and industries. Automotive, real estate, export markets, and financial services are all in heaps of trouble. Among the biggest losers, somewhat surprisingly, are exporters focused on providing China with recyclable materials . In fact, as described in Matt Richtel and Kate Galbraith's piece "Back at Junk Value, Recyclables Are Piling Up" (New York Times, December 8, 2008), "Trash has crashed"!

Crash it has.  The value of recyclable waste has tumbled at an unprecedented rate.  It has been reported that mixed paper is now selling at $25 per tonne, down from $105/tonne in October (Official Board Markets).  Other notable drops are in specific metals -- tin is now selling for $5 per tonne (vs. $327 earlier this year).

This shift is leaving marks on the ground.  Many large recyclers have been forced to start to stockpiling and warehousing tonnes and tonnes of material.  Some of these material dealers are stuck in contracts with large cities where the cardboard, plastic, paper and metals is simply continuing to stream in.  Alternatively, some are hoping that the market will bounce back and are holding on to the material in order to sell-high.

Recent recycling trends have compounded these effects further.  The switch away from source-separated systems towards commingled recycling programs worked well when the value was high. Now, the additional processing costs embedded in the unsorted waste streams make the material even harder to move.  The city of Toronto has recently switched to a commingled system and as a result, may have its own stock piles to deal with when current contracts expire.

This downturn has shed some light on the capitalistic realities that have sparked recycling booms across most urban centers. The material has to end up somewhere -- if it's not possible to sell it (without a financial loss) it will undoubtedly end up in a landfill.  While the feel-good effect transferred to dedicated recyclers is worth noting, it is the re-sale value of these materials that allows all of us to feel a little green.

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