The end of 2008 through March of 2009 has seen a precipitous drop in the price of commodities, particularly aluminum, steel, and iron, though copper is improving in China. This drop has caused a similar drop in the price of recycled, or scrap materials from recyclers.
As I have written previously in, "Your Garbage, My Money," recyclers were seeing a real boost in the price for their metals, etc. However, the cratering of commodities and the global economy as a whole, has seen the demand for scrap drop accordingly. eFax Annual Subscription
For all my readers who love charts, I have included charts from metalprices.com, who kindly allows the reproduction of their charts. Below, you will find charts for scrap iron, which includes steel, and scrap aluminum.
What does this spell for recyclers? Simple, the gray old mare ain't what she used to be. Like every business in the industrial supply chain, from oil to scrap to finished products, demand has fallen and everyone is pinched. Some recyclers are refusing new items, as their yards are filled to capacity. Cheap? No. 100% Free. Trade stocks for free on Zecco.com. The Free Trading Community. www.zecco.com
Some of the largest recyclers are US municipalities. Solid waste fees were paid in part by the sale of recycled local waste. Now, according to americancityandcounty.com, municipalities are seeing drops of 50% in their recycling revenue and now are considering additional user "fees" to cover the short fall. In other words, taxes. Compare Auto Insurance Quotes and Save!
However, some localities are fighting the decline in prices with an increase in supply, "Others, like the Philadelphia suburb of Cherry Hill, N.J., are even paying residents with retail vouchers to recycle through a program from New York-based Recycle Bank."
Even when it comes to trash, the market sorts itself out. As long as steel and aluminum are being produced, there will be a market for scrap, though watch for many of the smaller players to get consolidated as the demand for continues to drop.