OLYMPIA — Recycling programs in the south Puget Sound area remain on solid footing, despite a precipitous drop in the market value of recycled materials such as cardboard, plastic, aluminum and newspaper.
Like the U.S. and global economy, recycling commodities markets have crashed in recent months, recycling and solid waste officials say.
“It’s been very difficult, especially the speed of the decline in prices,” said Jeffrey Harwood, district manager of LeMay Inc., whose subsidiary companies pick up and process much of the recycled materials in Thurston County.
For instance, he said, recycled cardboard has recently been worth about $35 a ton, compared with about $150 a ton six months ago. High-grade office paper has dropped to $75 a ton from a recent high of $240 a ton, he said.
“But there’s no plans to scale back recycling programs,” Harwood said. “We know the markets will come back. It’s an essential part of our business and it’s the right thing to do.”
The drop in prices prompted LeMay on Dec. 1 to stop offering its high-volume commercial customers credits on their monthly recycling bill for such items as cans, plastics and cardboard. The credit is tied to the resale value of the recycled materials.
“This past year, we have seen our cost for hauling and processing rise, while the marketable value of the recycled material has collapsed,” LeMay said in a letter to some of its commercial customers.
LeMay recycling coordinator Emmett A. Brown said none of the company’s commercial customers has scrapped recycling programs in response to the higher monthly bills.
If the prices continue to be flat, thousands of residential curbside recycling customers could see a loss of the credit they receive on their monthly bills, which ranges from $1.30 for multi-family customers to $2.09 per month for residential customers in urban areas.
The net effect of the credits is to cut by roughly one-third a residential recycling customer’s monthly bill.
For a regulated utility such as LeMay, elimination of the credit would require approval by the state Utilities and Transportation Commission.
No recycling companies have filed requests yet to remove the credits granted customers, UTC spokesman Marilyn Meehan said recently.
The city of Olympia runs its own residential curbside recycling program, but it sends the material it collects to LeMay for processing.
“When the market falls out, it just means we receive less credit on our bill from LeMay,” said city Public Works Director Michael Mucha. “But it will have no effect on the curbside program customers.”
In some regions of the country, recyclers are stockpiling materials or, worse, sending reusable materials to local landfills.
Statewide, some stockpiling is under way but there is little incentive to send recyclables to the landfill because of the costs of garbage disposal, said Preston Horne-Brine, owner of Fluxion Enterprises, a Seattle-based recycling business consultant.
“This is a tough time, with a major crash in prices,” he said. “But the recycling industry in the Pacific Northwest is robust and resilient enough to withstand shocks.”
He said the market for recycled materials has been at historic highs for five years as manufacturers have grown to rely on these materials for feedstock.
“It’s remarkable how long those good markets have lasted,” Horne-Brine said.
Statewide, nearly 7.7 million tons of material was recycled or diverted from the garbage in 2006, according to the state Department of Ecology. That compares with 2.5 million tons in 1996.
At the same time, the amount of solid waste generated per capita each year rose from 1.73 tons in 1996 to 2.73 tons in 2006. This includes garbage and recycled materials.
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