Dive Brief:
- While crude oil shipped for more than $120 per barrel in 2012, it has steadily dropped, dipping below $30 in recent weeks, according to Nasdaq.com, and this downward spiral has impacted plastics recyclers in a bad way. As the cost of petroleum and natural gas, used to make new plastic declines, the incentive for investing in salvageable waste also falls.
- Andy Michaletz owner of Owatonna, MN- based Poly Plastics, which makes pellets from industrial waste, said he's been forced to compete with suppliers of new plastic. For now he's focusing on the most profitable products and stopped making the others.
- Companies that offer curbside recycling say they are feeling the squeeze too, including Southeastern Minnesota Recyclers Exchange. In 2014 the company averaged 12 cents per pound for polyethylene, but that figure was halved at 6 cents per pound last year and dropped to 2 cents per pound this year, according to the company's Executive Director Sharon Schriever. She noted trends outside the state and even overseas have contributed to declining values.
Dive Insight:
There have been dips, spikes, and plateaus for some time, showing unpredictability — just this past December some plastics were holding steady while others were rising in value. But the most recent decline has been steep, leaving recyclers and recycling stakeholders vulnerable.
"… we can recycle very well with low prices, but when the price moves rapidly, you just don't know where the floor is," said Michaletz, adding, "People's green tendencies aren't as deep as you think.'' He also said that this has been a wake up call into the connection of commodities around the world and the dependency of the US economy on oil and gas.
Steele County is a member of SEMREX, a joint board of counties and cities that supports recycling, for instance selling recyclables to companies for reuse. But Waste Management Inc. of Minneapolis has taken on that role locally.
Schriever has managed to tap into local markets, and in the process avoids high shipping fees. Still the barriers exist — not only due to lower oil prices driving down cost of virgin materials, but due to contamination from single stream recycling.
Just the same, the local governments Shchriever does business with are recycling as much as before these hard times. She said materials are likely to rise again, eventually and "As long as we're able to move it, I think the counties are committed to do what's right with the resources."
