The economic slide has been brutal to many
industries, among them scrap. Hopes that electronics recycling
eventually would become self-sustaining from commodity revenue
"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
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
The city collects aluminum cans, steel, paper,
glass and plastic. Sometimes it makes a profit from these
materials; other times, it ends up writing checks to the
recycling contractor. Glass never pays its way even in the best
of times, although that commodity's red ink got much worse when
Madison stopped asking residents to sort their recyclables in
The earliest period with statistics, early 1991
through mid-1994, saw Madison paying its recycling contractor
as much as $14,904 a month. Late 1994 and most of 1995 were
positive, including the best month in Madison's recycling
records a net gain of $114,561 in May 1995 thanks to peaks in
aluminum cans, corrugated cardboard and high-density
A very cyclical decade followed. The net cost of
Madison's recycling was negative for most of 1996, positive
through August 1998, negative through May 1999, positive to the
end of 2000, negative through April 2002 and then mostly
positive to the end of sorted, or multi-stream, recycling at
the end of September 2005.
The 1995-2005 annual troughs were negative $8,940,
$16,190 and $15,616, in contrast to cyclical peaks of positive
$20,145, $37,903 and $43,496. Single-stream recycling did fine
in its first three years, with a monthly peak of $106,748 in
net revenue for the city in July 2008-just before commodity
prices began their plummet. December produced a negative
$69,155, followed by a minor improvement as 2009 opened.
Much ink has been spilled over whether recycling
makes sense when it doesn't pay its way.
An enthusiastic debater on the topic is journalist
and blogger Adam Minter, a Shanghai resident whose family owns
a Minneapolis scrapyard. In January, he was a guest from afar
on an Irish radio program discussing recycling and China.
Minter told his blog readers he was bothered by the
mindset he encountered during the broadcast that recycling is a
civic responsibility rather than a business and that China
somehow failed to live up to its end of an implicit bargain
with the countries providing China with recyclables.
"It was an extraordinary cycle while it lasted" but
was unsustainable, according to Minter. The Western economies
eventually cooled and bought less from China, leaving China
much less interested in foreign scrap.
Paradoxically, neighborhood recycling is more
pervasive in China than in the United States, Minter said. But
it is extremely responsive to price cues in its choice of
materials, low in prestige and lacks any do-gooder element.
It's a livelihood for poor people.
One response to Minter came from Robin Ingenthron,
an environmental activist who also heads an electronics
recycling company operating in Vermont and Mexico.
Ingenthron's view is that mining and primary
smelting have so severe an impact on the environment that scrap
should always be the preferred source of metal units. "The
worst recycling is preferable to the best mining/forestry,"
Ingenthron posted to Minter's blog. "If the West doesn't export
(scrap) copper wire, China will buy cathode and blister copper
from primary smelters and mines. You need to go spend a year
beside the Chuquicamata copper mine in Chile."
The tensions between recycling the business and
recycling the ideology are sometimes resolved by politicians.
An interesting take on that process was offered last year when
George Adams began his two-year term as chairman of the
Institute of Scrap Recycling Industries (ISRI).
"For the record, I have my doubts about the science
of the climate change debate. (But) the climate change debate
is happening whether we like it or not. Politicians across the
world are climbing over each other to make laws that are
somehow supposed to stop ice from melting."
Adams quoted an ISRI panelist as saying that anyone
who does not have a seat at the table is likely to be on the
menu. "Carbon credit trading or some other type of carbon-based
economic model is highly likely in the next few years. That
debate is either going to cost us money, save us money or make
us money, depending on how prepared we are to participate,"