Plunging prices for recyclables are hurting businesses

By Zeke Barlow

At California Public Recycling, piles of junk are starting to build up.

Just a few months ago, the mounds of computer motherboards, airplane wings, sprinkler nozzles and copper wire were worth some serious cash. But the sinking economy has claimed another victim — recycled goods — and the value of the old metal parts at the Oxnard recycling yard often doesn't cover the cost of handling them.

"There is a wholesale collapse of the metal market," said Marc Keenberg, CPR manager. "I've seen ups and downs but never anything like this."

Products such as iron are at 30 percent of their value, copper is worth half its previous value and aluminum is down a third, he said. Places that used to pay for paper products are now charging customers to take it.

Some fear that with little incentive to recycle scrap metal and paper, the products may end up in the landfill instead of being recycled. The situation has become so dire the state recently started looking into how it can solve the problem.

"California's environment may face a potential setback as the depressed global economy and an excess in global inventory have reduced prices being paid for recycled newspapers, old corrugated cardboard and plastics around the world," according to a recent statement from the California Integrated Waste Management Board.

The depressed commodity market that largely dictates the value of recycled materials has affected scrap materials more severely than the bottles and cans that are recycled.

Though the value of those has also fallen, they carry a minimum price set by the state so the bottom hasn't fallen out.

But other markets are hurting.

Part of the reason scrap materials are so devalued is that fewer consumer goods are being bought from China and other overseas manufacturers. The result is less demand for the materials to make the goods, which means less demand for recycled metal.

It's a cycle that has come to a grinding halt.

John Scheck, one of the owners of Standard Industries Recycling, said he used to have scrap dealers scouring the countryside for old tractors or farm equipment to resell. One tractor could bring in as much as $15,000 at the height of the market.

He said steel, once going for as much as $600 a ton, is now worth only about $50.

Copper peaked out at $4 a pound and is now worth about $1.60.

The foundry Keenberg used to sell to is no longer accepting any scrap because it already has so much processed scrap metal that nobody is buying for construction.

Keenberg said he's had to lay off three employees and sometimes sends his remaining workers out for scrap that's not worth anything just so they can stay busy.

When he pays people for the scrap they bring in, they balk at the low price.

"Their response is ‘Now I'm just going to put it in the dump. It's not even worth coming here,'" he said.

Jose Gonzalez rummages through trash cans to find old tennis rackets, aluminum siding and wire to recycle and supplement his income, but these days it's getting harder to make money as a metal scavenger.

After driving from Newbury Park to CPR in Oxnard, he got about $20 for a load of scrap metal, about half what he would have gotten a few months ago.

Gold Coast Recycling, which serves a number of cities in the county, no longer pays anyone for bringing in paper products and instead charges to haul it away — the same amount as garbage.

"The fiber market has gone away," said spokeswoman Nan Drake. The cost of shipping has increased so much the company can no longer pay for the goods, she said.

Oren Zarin, manager of Camarillo Recycling, said he's starting to store bulk paper and metal goods to sell when the market gets better.

"I think it'll take several months," he said. "I don't have that much space."

In Ventura County, businesses are offered incentives to use recycled materials when making products by taking advantage of low-interest fixed-rate loans through the state.

"This program has been in place for 13 years, but it has become especially important as a result of the current crisis in credit availability," said David Goldstein, who coordinates the program for the county.

But Keenberg thinks there's a long way to go before the bottom is hit, and the piles at his scrap metal yard could get a lot bigger.

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