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Trash business in the dumps: Tons of recycled paper, worth nothing, pile up
(Gloucester Daily Times, Mass. Via Acquire Media NewsEdge) Jan. 6--There are a lot of ways to measure the current economic crisis: the tumbling Dow Jones Industrial Average, the billion-dollar Wall Street bailouts or the skyrocketing unemployment figures.
Here's another way: the rising mountain of trash on Jefferson Avenue in Salem.
Behind the fence at North Shore Recycled Fibers, bales of recycled paper are piling up higher than the average American's credit card debt. A company that normally has about 400 tons of paper and cardboard in storage now has 8,000 tons on this 3-acre site and in warehouses.
There's a reason recycled paper is piling up -- nobody can sell it for a profit. Just like many facets of the economy, the price for recyclables has crashed big time.
Last summer, recycled paper was selling for $160 a ton. Today, the paper mills are paying $5.
The fall in paper prices isn't just bad news for the recycling business. It will affect many cities and towns on the North Shore, which get monthly checks for the tons of paper that is recycled.
Marblehead, for example, receives about $5,000 a month from North Shore Recycled Fibers, or $60,000 a year, which goes into town coffers. Those checks are about to stop.
Beverly figures on losing an estimated $60,000.
It's even possible that cash-strapped municipal governments could start getting billed for the cost of processing the tons of paper picked up at residents' homes.
Not so bad in Gloucester
Gloucester, for the moment, is in better shape.
The city has a contract with Waste Management under which it pays a small flat fee for plastics and paper pickup. Waste Management then takes the paper to North Shore Recycled Fibers and the plastics to a facility in Lawrence.
"Even with recycling in a down market we're still better off paying the fee," said the city's recycling director, Kathy Middleton. The city pays a fee per ton to have the rest of its trash hauled off; if residents recycled less the city's cost to dispose of its of trash would rise.
"Recycling is still a positive thing to do for the city because we pay a fixed cost to recycle, we don't pay a tonnage fee," Middleton said. "If we didn't recycle, we would pay more for tipping our trash."
The city's contract with Waste Management expires in June. Middleton said Public Works officials are reviewing what the city gets in its contract, and what it would want under a new contract. "We're just now trying to see what will work best for the city," Middleton said.
One city's trash is another companies misfortune
Salem, like Gloucester, is also in a good spot.
The city signed a three-year contract in July that guarantees it will be paid $65 a ton for paper regardless of the market price. The average monthly payment is about $9,000 and should be higher when the city increases its recycling efforts next month.
"Right now, I'm losing $65 a ton on the city of Salem," said Bob Heffernan, vice president and general manager of the northeast region for Newark Recycled Fibers, which runs the Salem plant.
Paper isn't the only recyclable that's in trouble. It's the same story for aluminum, copper and many other items.
The price of wastepaper has fallen precipitously, Heffernan said, because the export business to China and India -- big buyers of recycled paper -- has dried up, and the domestic economy is in a tailspin. Companies that make cardboard boxes out of recycled materials aren't making as many boxes.
"Right now, a ton of cardboard is worth about zero," Heffernan said.
For now, North Shore Recycled Fibers is just waiting it out and storing wastepaper until the prices improve.
"I have my warehouse (in Salem) full, and my yard is full and I have warehouses around that I'm filling up with paper that I can't sell," Heffernan said.
He also can't ship it to landfills, at least not in Massachusetts, because of a ban on dumping paper.
The hope, of course, is that the market will turn. The recycling business runs in cycles and, as they say, prices that fall always rise. There has been speculation that could start to happen early next year.
"We've weathered storms like this before," Attridge said.
But, right now, the recycled paper business is -- well, down in the dumps.
¢¢¢
Staff writers Andrea Holbrook and Paul Leighton contributed to this report by Tom Dalton. They can be reached at aholbrook@gloucestertimes.com.
To see more of the Gloucester Daily Times or to subscribe, go to http://www.gloucestertimes.com/.
Copyright (c) 2009, Gloucester Daily Times, Mass.
Distributed by McClatchy-Tribune Information Services.
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