Seeking Shelter

THE WASTE INDUSTRY witnessed an important truth in 2002: Sometimes markets do matter, even when it comes to trash. What some call the three W's — worries about the economy, workforce reductions and war concerns — have affected New York and other cities that decided to scale back recycling last year. And the continued uncertainty about the economy in 2003 has recycling markets still teetering like a rickety see-saw.

“It's a difficult time, and even when you talk about state support of recycling markets, it's difficult to know what programs will be able to continue supporting themselves and which ones won't,” says Mary Ann Remolador, program manager for the Northeast Recycling Council (NERC), Brattleboro, Vt. “People still are unclear just how much staff or funds they will have for the coming year. That could have a large impact on the health of the recycling industry. It will require the businessperson to be very efficient.”

Politics of Recycling

The pressure on recycling caused by the downturn in the economy has been significant for recycling coordinators who depend on sales tax revenue as the base of their budget, says Kate Krebs, executive director of the Washington, D.C.-based National Recycling Coalition (NRC). Prices for recycling commodities — paper, glass, steel or aluminum — fluctuate frequently, and “it's always a challenge,” she says.

With war a reality, revenue streams from recycling commodities may be in trouble, Krebs adds. “The last time we saw something significant happen [in the markets] was in the Gulf War,” she says. “Cargo containers were taken out of the supply stream and used for the war effort. Inventories started piling up on loading docks, mainly fiber, to go overseas. Using that experience, we can prepare for an overseas effort again [by diverting some recyclable commodities to support the war].”

Current economic and political conditions have affected recycling markets. But that's not the whole story, says Robin King, vice president of public affairs for the Aluminum Association, Washington, D.C. “The recycling industry has been squeezed because of commodity prices, and the availability of small recycling centers has declined by more than half. There's also a lesser concern than there was a decade ago toward recycling in general,” King explains. “When recycling in an environmentalist sense was on the top of people's minds, it led to increasing recycling rates.”

Don't Knock Wood

While markets for some recycling commodities seem to be precarious, Krebs says emerging commodities may be positioned for growth. Many communities have reached a plateau in their recycling rates by diverting traditional commodities, she says. Communities now are beginning to look at other leftovers in the trash bin. These new sources include construction and demolition (C&D) debris, food waste and wood waste.

For example, a January 2003 NERC report noted that the new emphasis on sustainable building design, with its focus on recycling old building materials and using recycled-content materials, may lead to growth in the C&D recycling market. And ironically, while the weakened economy has hurt some areas, it pushed the Federal Reserve to lower interest rates, which has boosted the C&D debris recycling market.

“When interest rates in home mortgages go down, there is an increase in C&D debris. The recyclers who have moved into that niche are taking [it] very seriously,” Krebs says. “Whether it's new homes or remodels, there's an increase in C&D debris, which is a whole new niche of recycling. You don't see big building booms when interest rates are high.”

Government and municipal mandates, such as the interest rate cut, “green building” tax credits and sustainable rating systems, all contribute to the growth of this sector. Additionally, the C&D market is benefiting from pending bans of treated wood from landfills in various states, NERC's Remolador says. The completion of ASTM International standards for commercial uses of lumber made from recycled post-consumer plastics also is likely to boost C&D recycling.

Home construction has affected fiber markets, too. Although recovery has been slow for domestic mills that witnessed a depressed market for newsprint and linerboard, recovered fiber is needed in construction applications such as cellulose insulation, fiberboard subflooring, acoustic panels, roof systems and siding. So as long as the housing market remains stable, ample opportunities exist.

The world paper market also has seen rising prices for pulp in recent months, according to an April 2 market report from the Institute of Scrap Recycling Industries (ISRI), Washington, D.C. “Assumed economic recovery in 2003 should translate into fresh demand for all grades of scrap paper,” the report states. “Most analysts and packers foresee a gradual increasing price trend.”

Shattering the Glass Ceiling

Glass markets generally are sluggish. Yet research is continuing on new market opportunities, both here and abroad.

In December, John Reindl, recycling manager for the Dane County, Wis., Department of Public Works, updated a report on recycling and reuse of glass cullet for noncontainer uses. Because transportation costs and difficulties in mixed-cullet processing have posed problems in the glass container market, recovery for noncontainer uses is growing more rapidly.

Again, some of the most interesting applications are in building materials. Reindl reports that Headwaters Composites, Three Forks, Mont., makes countertops by mixing glass cullet with power plant fly ash. Glass tiles have been an important end-use for cullet for years. And in 1999, Echo Environmental, New York, created Glass Concrete, which blends recycled glass with cement to create a new form of concrete. According to the company, the demand for Glass Concrete far exceeds its supply. Paving is another still-viable option. Last year, the Delaware Solid Waste Authority, Dover, began using 10 percent crushed glass and 90 percent other aggregates to make asphalt.

Bottle bills have helped to maintain a steady supply of glass in those states that have the program, NERC's Remolador says. “States that have the bottle bill … are at the forefront of trying to identify new markets for the glass because they are forced to deal with it,” she says.

Metal (and Plastic) Mania

Overseas demands for scrap metal and plastic have been booming in recent months. According to a February report from American Metal Market, Chinese buyers of scrap plastic have “sent shock waves through a less than sluggish domestic market.”

This is good news, given that economic conditions have kept domestic demand for plastic — primarily recycled polyethylene terephthalate (PET) — soft, according to a recent study by R.W. Beck, Orlando, Fla., for the American Plastics Council (APC), Arlington, Va. The supply of post-consumer plastic bottles has lagged behind market demand, the report states, because of several factors, including a mature recycling collection infrastructure, reduced state and local recycling budgets and lack of recycling education among consumers. For example, consumers tend to recycle plastic bottles used in the kitchen, ignoring bottles from laundry, bathroom, garage and yard applications.

Yet there are still emerging markets for recycled plastic bottles, such as plastic lumber, APC's report states. Plastic lumber outlets have expanded from specialty lumber stores to large chains such as The Home Depot. ASTM standards defining plastic lumber specifications have had a “significant impact” on the expansion of this market, the report says.

Scrap steel also is seeing growth. “The demand for scrap is unbelievable, and as the dollar is weakened, it's getting better,” says Bill Heenan, president of the Steel Recycling Institute, Pittsburgh. “2002 was a record year for total scrap recyclables. Exports went up 30 percent, and they have been filling those orders for China and Asia. Prices have been on an upward curve for the past five months.”

At the same time, ISRI has reported that domestic order rates for iron and steel are being described as “mediocre,” and that the continued pace of export demands may be uncertain. “Assumed recovery of the U.S. economy this year, combined with tightness in old and new scrap supplies could be enough, however, to counter the ‘steel bubble’ scenario envisioned by some,” the report concluded.

Heenan adds that the recycling rate for steel cans is still high, near 60 percent, although that rate “probably won't move up in any shape or form, because curbside has been flat.”

Meanwhile, the bloom may be fading off the rose in the auto industry. “We're starting to see the end of what has been a great run in the auto industry,” Heenan says, adding that the steel market has benefited from the enactment of tariffs on imported steel. “The domestic industry has done a little better,” he says. “The signs are pretty good.”

The Steel Recycling Institute has pushed to increase recycling of domestic supplies through various educational initiatives. One focus is on collecting aerosol cans from deodorant or other toiletries. “We're missing some potential supply there,” Heenan says. “People completely forget about recycling when they are away from their kitchen. Yet they can throw [aerosol cans] in the same recycling bin. Recycling doesn't stop at the kitchen.”

In a similar vein, the Aluminum Association says aluminum recycling still is doing well, with Americans recycling about half the used beverage cans consumed. Yet this is evidence of a gradual drop-off in recent years, King says. The decline is due to “a combination of industry, economics and what I note as sort of a decrease in environmentalism,” he says.

The first quarter of 2003 showed a “modestly positive” price trend for aluminum, according to ISRI. Yet the global aluminum supply still is expected to outpace consumption. “[Al]though the Western World market is showing signs of increased consumption, overall industrial production and economic recovery led by the United States is less than certain in light of mounting geopolitical tensions,” ISRI reports.

Economists are cautiously optimistic that military action will be swift and that any subsequent downturn in the recycling markets also would be swift. If that happens, then the economy may continue the slow recovery that was predicted this year.

Still, recyclers are hoping that home building will help boost their recycling markets. For six years, the Aluminum Association has sponsored the Aluminum Cans Build Habitat for Humanity Homes program, in which aluminum cans are recycled to raise funds to build affordable housing for low-income families. “We are expecting to recycle about a million dollars worth of pounds in 2003,” King says.

As long as Americans need homes, markets for C&D, as well as other commodities, might just find shelter. So while war has kept the economy on an uncertain footing, for recycling markets, there may be a new meaning to the phrase “home front.”

Kim A. O'Connell is a Waste Age contributing editor based in Arlington, Va.