Fee-for-service is back big time on recycler’s e-agenda

Apr 20, 2009 | 10:15 AM |

The economic slide has been brutal to many industries, among them scrap. Hopes that electronics recycling eventually would become self-sustaining from commodity revenue have faded.

"We're no longer paying for the lowest-value products, like printers, faxes, copiers, etc. Even some items with higher metal contents are not generating enough in material value to cover processing costs," said a manager at one electronics recycler that handles most of the physical processing in-house with high-end technology.

Sims Metal Management Ltd., which boasts the world's largest electronics recycling intake, told financial analysts that high-tech recyclables may soon return to a fee-for-service model, charging clients supplying the defunct equipment.

During the high-price period, the company was profitably able to pay for discarded electronics from commodity revenue and from reselling equipment or parts that still worked. But the second half of 2008 changed all that.

Most municipal recycling agencies have been running at a loss since autumn. Madison, Wis., which keeps detailed records, recently shared its flow-of-funds tallies with AMM. ....