Buyers for recyclables suddenly hard to find
Large square bales of smashed cardboard and multicolored plastic bottles piling up at a local recycling company aren’t intended to be the latest modern art installation.
Though the growing mass of stashed materials is kind of pretty in its own way, the goods which are ready for transport at Curbside Recycling Indefinitely are an example what can happen when a slowing economy and knockoff in construction and the production of goods decreases the demand for cardboard, plastics, newspaper and metals.
Before November, company president Steve Foss, could get about $100 a ton for cardboard.
Now, mills will buy a ton of the material for closer to $30 a ton. It makes more sense, Foss said, to stockpile it and sell it off when the market prices look rosier.
“I can’t afford to ship it right now,” said Foss gesturing toward a thick wall of cardboard at his sorting plant off West Avenue. “I have lots of square footage. I’ll just sit on it and play the waiting game.”
But it’s anybody’s guess when the market for such goods will bounce back, said Randy Van Gundy, vice president of Van Gundy’s, 645 Fourth Ave. Not only cardboard, but prices on other materials have dipped drastically, making virgin products more affordable than recycled products, according to some local companies that accept recyclable materials.
“Do I think we’ve hit bottom? I hope so,” he said. “But this economy is not looking that great.”
Van Gundy, who runs a recycling salvage yard, said the steep drops in the value of recyclable materials seemed to happen nearly overnight first in August and then again in October and November.
At one point, the price of scrap metal fell 40 percent in one month, the most drastic decrease he said he’s seen working in the business his whole life. Luckily, he sold a load of scrap metal as prices started on their downward trend. Others, who had been waiting to fill a whole load of scrap metal before selling, were stuck with the rock bottom prices.
“I lost money, but I could have lost more,” he said. “Who knew? I just decided to get it over with. It caught a lot of people by surprise.”
Still, Van Gundy said, the company does not plan to stockpile its materials or lay off any of its 25 workers.
Mills are still accepting scrap steel, though in lesser quantities. Mills, he said, are reporting having a surplus of steel pipes, but with a nationwide decrease in new construction projects, few are buying.
Steel cans that sold for upwards of $200 a ton are down to about $25 a ton, Foss said. In the day it took for a trucker to leave Grand Junction’s sorting facility with a load of steel and travel to a Pueblo steel mill recently, the price fell from $50 a ton to $25 a ton, a price that barely covered the transportation costs, Foss said.
A ton of newsprint is now worth about $60 a ton, down from $160 a ton, Foss said. Plastics that went for 30 cents a pound, now sit at the facility because they fetch 5 cents pound, he said.
“The recycling industry is what we call cyclical,” Foss said. “When oil is up to $147 a barrel, we love that.”
Plastics comprise mostly petroleum. When oil prices are up, companies look to recycled plastic.
Conversely, low oil prices cause companies to use the less expensive, virgin product.
Ironically, the dip in market prices for recyclables comes at a time when CRI is experiencing large gains in its customer base, as more people are taking an interest in recycling. The facility that started in 1989 used to garner from 30 to 60 people a day at its drop-off facility and collect about 20 new residential customers a month. These days, the drop-off location sees more than 100 vehicles a day.
The company, which now grows by about 44 residential customers a month, cannot take on any more commercial customers because it can’t expand fast enough to accept the materials.
“Everybody wants to get into recycling because it’s the right thing to do,” said Elaine Foss, vice president of the company.
Thankfully, Steve Foss said, CRI made some infrastructure purchases such as new conveyor belts and built new sorting bins before market prices crashed. Still, a planned expansion has been postponed until prices return.
Mesa County’s Solid Waste director Bob Edmiston said it’s too soon to tell whether more recyclables are ending up in the Mesa County Landfill as a result of the materials’ low market value. It’s not a study the county would do because it would cost more money to do than the value of the information, he said.
While Van Gundy could choose to stockpile materials, he’s selling off the goods, albeit more slowly these days. Since this fall, prices of steel are down 45 percent over last year; copper has dropped more than half of its former value; and brass is down 65 percent, he said.
According to city code, Van Gundy’s yard is restricted to piling materials to a 25-foot height, but he can pile to a 30-foot height for three months of the year. Van Gundy said his materials haven’t reached the 25-foot limit. Some longtime sellers to the salvage yard are surprised to hear the going rates, he said.
“When prices were good, everybody was recycling scrap nonstop,” Van Gundy said. “It doesn’t make it worthwhile for an individual to go and get it now.”