PROFILE: Stein Predicts Market UpswingPROFILE: Stein Predicts Market Upswing
December 1, 1994
WORLD WASTES STAFF
WW: Reflecting upon your experience in the paper industry, what changes have you seen within the last 10 years?
AS: I've seen lots of changes. Ten years ago, people weren't as committed to recycling as they are today. Now the public is dedicated to filling landfills less quickly by extracting waste commodities. Government also has expressed interest through the executive order, which requires recycled content in all government purchases. And the new paper mills being built are using "urban forests" - major metropolitan areas that create waste paper - instead of traditional forests.
WW: Which commodities are the most marketable at the present time?
AS: Most of the waste steam consists of paper, which is probably the easiest commodity to market right now. Of course, aluminum has never been difficult to market and plastics seem to be getting easier as time passes and those markets evolve.
However, the paper business has been around forever - and it's still evolving, with new capacity coming out almost quarterly. With all this new capacity, I've seen a dip in supply and demand for paper, where demand is greater than supply, so prices rise. I think that activity will calm down as the infrastructure develops to collect materials.
When the popularity of recycling started rising a few years ago, supply grew faster than overall demand, so prices were really depressed. We're starting to see that cycle turn a little bit as the infrastructure is put into place to collect more materials.
WW: What are the pros and cons of regionalized marketing programs?
AS: There are a lot of pros. In fact, I don't think regionalized marketing has any cons. Markets are regional, not national. Not every area has paper mills, glass plants and aluminum or steel can processing facilities.
Region by region, markets differ and the companies that utilize materials change. By marketing regionally, you can have a lower number of customers that your facilities can share on a consistent basis. You also can build better relationships and have more control over a greater amount of materials.
WW: What factors should municipal recycling coordinators consider when developing markets?
AS: They should consider the quality their facility will generate and they should look for stable, long-term relationships.
WW: How will recycling markets change over the next five years?
AS: They'll change tremendously. Over the next year, we'll see prices in paper commodities and plastics rise even more than they have recently. Corrugated, for example, has gone up and it's come back down. Next year we'll see it up a little bit again.
In general, the infrastructure will be put in place to handle more volume. In the long term, we'll see prices come back down - instead of the "lows" where they've traditionally been, they'll settle at higher "lows" and we'll get better return.
One of my favorite analogies over the years is that recycling is like an $800 goal: The goal has gone from $35 to $800. It isn't worth $800, but it's sure worth more than $35.
WW: What are your goals as vice president of materials marketing?
AS: In the long term, we would like to be material managers in this business and learn how to manage the different materials from the waste stream for their values. We also want to offer customers the services that they want, including recycling different types of commodities, and to be the best supplier and materials handler in the business.
WW: What are the main barriers to marketing recyclables?
AS: If the quality of the materials is not correct and if the specifications aren't right, it can be very difficult to market any commodity.