Centers Hoard, Settle for Less

ELLSWORTH — Buy, hold or sell are familiar stock market terms that now apply to recyclables.

Ordinarily, one man’s trash becomes another’s global commodity. But that commodities market is suffering from the international economic crisis that is driving down prices on virtually every recyclable from newsprint to tin.

Recycling centers that have enjoyed unusually high prices for their “products” the last two years are now, in some instances, having to pay to have the material carted away.

As a result, recycling centers that have the room are stockpiling items that are usually in demand, such as newsprint, corrugated cardboard and tin, until the market rebounds.

“Short term, I don’t think things will get better,” said John Albertini, program coordinator for the Maine Resource Recovery Association (MRRA) in Bangor. “But the centers should keep selling unless they have ample storage space.”

MRRA helps the centers find a market for their recyclable and reusable materials.

“Demand is way down, so they can offer lower prices because they don’t need the material,” Albertini said.

“China is a large market factor,” he said. “They currently have high inventories” [of recyclables]. This lack of buying puts a strain on the U.S. markets.”

He also said a much needed market correction is taking place.

For instance, corrugated cardboard six months ago commanded $150 a ton, but is now down to $10-$45. A more realistic price, Albertini said, is $60-$65.

Recycling centers were getting up to $150 a ton six months ago for newsprint, but that price has dropped to $40.

A more appropriate price, Albertini said, is about $60 to $75 a ton.

No. 2 plastic, such as milk jugs, was selling for about $850 a ton two months ago, but today’s price is about $275-$300.

Tin cans, Albertini said, were averaging $300 a ton four months ago, but with the slowdown in building in China, India, Pakistan and other countries, the price has now fallen to below zero when the cost of getting it to market is factored in.

Coastal Recycling Center in Hancock, which handles recyclables for Hancock, Franklin, Sullivan, Sorrento, Gouldsboro and Winter Harbor, is taking steps in response to the decrease in prices.

As of Jan. 1, the center will no longer accept No. 1 plastic and paper board.

The plastic is mainly used for food items such as mayonnaise, salad dressing and peanut butter.

Paper board includes mail, cereal boxes, white paper and other non-corrugated paper products.

“It’s better for the towns to send it to PERC (Penobscot Energy Recovery Co.),” said Chuck Davis, Gouldsboro’s board representative to Coastal Recycling.

“Their incinerator generates electricity, which comes back to the towns who are members of PERC in the form of rebates,” he said.

The manager of Coastal Recycling, Joyce Levesque, said the center does not receive a great deal of No. 1 plastic. And paper board, she said, has never paid well.

“The last I heard it was a negative $15,” Levesque said.

She said the center had been turning a profit in recent months and has enough of a surplus to carry it through until June, but then towns would have to be assessed more if the market downturn continues.

“I don’t know if we will hit rock bottom and have a negative number on all of them,” Levesque said.

Sam Morris, a planner with the state Waste Management and Recycling Program, said recyclables have always been a cyclical market like any other commodity.

“The markets have dips, but we’re still encouraging people to recycle,” he said. “It’s still the best waste management tool we have.”

Currently, Morris said, Maine recycles 36 percent of its 2 million tons of waste, or about 700,000 tons.

He said municipalities need to ride out this downturn and keep to their recycling agendas.

“It’s a long-term commitment to use that as your waste management strategy,” Morris said. “It’s not a speculative gain.”

Peter Prata, plant manager at PERC, said there is no sign that towns are diverting more of their recyclables to PERC for incineration.

“Our tonnage is pretty consistent,” he said.

PERC, however, is feeling the effects of the diminished demand for ferrous metals, such as iron and steel.

PERC recycles up to 11,000 tons of ferrous metal each year.

Prata said the market for the metal is so soft that the company now has to pay to get rid of it.

“It used to be free, now it’s $15 a ton,” he said.

But Prata said the drop in price for ferrous metal was something for which they were prepared.

“We anticipated this was coming,” he said. “We were told at the beginning of the year there would be a drop in demand after the Olympics in China were over and all that building stopped.”

The collapse in the recyclables market is affecting every Hancock County town.

Leann Beal, deputy treasurer and tax collector in Ellsworth, is in charge of the city’s transfer station and recycling center.

She said it is clear from the current prices they are getting for their recyclables that the city will not meet its targeted revenue this year.

Beal said a meeting will be held to discuss the situation, but no exact date has yet been set for that meeting.

Chip Reeves, who directs the Public Works Department in Bar Harbor, said the town has been stockpiling newsprint and corrugated cardboard until the price increases.

“It causes us problems in terms of being able to move around our yard, but we have to be able to get rid of material without having to pay,” he said.

“This summer we were making money,” Reeves said, “now it’s costing us.”

Tony Smith, Public Works director for Mount Desert, which operates the recycling program, said they pay a company to haul the material to Bangor Recycling, which then markets it through MRRA.

“We pay all of them a fee,” he said. “If there is any money left we get it.”

Smith said the program traditionally turns a profit of $3,000 to $4,000 each year, but is expecting to operate at a loss in the fourth quarter this year.

Mount Desert will do what MRRA has suggested, he said, which is to let them hold onto their revenue checks for the third quarter to cover any costs in the fourth quarter.

Victor Horton, executive director of the Maine Resource Recovery Association, said whatever members do, they shouldn’t reduce the volume of recycling that they are collecting.

“Look for ways to increase volume,” he said in a recent memo to member municipalities. “This may seem to be a contradiction when demand is dropping off, but do not draw back from recycling.”

“The more quality recycled product in the market, the more manufacturers will turn away from virgin raw materials when they decide to buy. The goal is to hold onto the buyer.”