Freefalling Recycled Paper Prices
January 16th, 2009
What a difference a few months make. The commodity price decline experienced during the second half of 2008 is well known. Oil prices are probably the most widely reported since each of us can easily translate $147 per barrel equals $4 gasoline while $38 per barrel six months later equals $1.35 gasoline. Copper, aluminum prices are at three year lows.
SOP prices have collapsed as well. What?
Sorted Office Paper is the most common grade of bulk, baled, shredded paper purchased by mills to be recycled into post consumer paper products. The September price of $235 per ton has fallen to $120 per ton.
Why is that important? Two reasons:
1.) its impact on the document destruction business economics, and
2.) how recycled paper prices affect the “green” movement
The document destruction industry relies upon “back end” revenue generated by the bulk sale of shredded paper. Companies charge their customers to pickup and shred confidential documents, and in a very competitive market, pricing and margins are influenced by an expectation of the price mills will pay for the shredded paper.
- 1300 pound bales of shredded paper ready for recycling
Margins will be squeezed, since contracts for service typically do not provide for adjustments based upon SOP prices. Companies prefer not to disclose that they get revenue coming and going. Sneaky? No. Transparent? Now it is.
More disturbing, is how recycling programs may be affected.
How many people would be willing to pay an additional service fee for their “free” curbside paper recycling usage? Will companies who jumped on the green bandwagon and began scrap paper recycling programs because recyclers would pay them $50-$100 a ton for non-confidential scrap paper drop their initiatives once those recyclers begin to charge for hauling it away?
Even more grim is the prospect that we are close to a price level where it is more economical to landfill paper than recycle it, and how will that affect corporate decisions when the bottom line conflicts with the desire to do the right thing for the environment?
What do you think? Will higher costs trump environmental impact? How sustainable is the sustainable movement when faced with this economic shift? I’d love to hear your comments.
Tags: document destruction, environment, green movement, landfill, paper recycling
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January 19th, 2009 at 12:54 pm
I don’t know what can be done about it is these trying economic times. It looks like everything is in freefall.
January 19th, 2009 at 2:33 pm
Wow, never blogged before. How does it look? Isn’t this considered ‘going green’? If so I would announce it everywhere. How did you come up with the idea? I did miss a conversation. Pretty neat.
January 20th, 2009 at 7:25 am
I believe we all want to do what is right when it comes to our environment. My community no longer picks up the glass at the curb so I must take it to the recycle drop offs. I will try to arrange this in my normal travels so it dosen’t cost gas for extra trips. We have abused the earth for many generations and now we will have to pay to keep it “green”. I think that corporations helped create our environmental problems by taking shortcuts to increase their bottom line. We must pay for what we want. I would hope we are all willing to help.
January 20th, 2009 at 9:29 am
As cities rethink recycling, I hope others will choose to continue their personal efforts using other options, as have you. Good for you. Thanks for your thoughts.
November 5th, 2009 at 2:59 pm
Anyone know where I can find a company to pickup my scrap paper? We are a printing firm, and have about a ton of scrap 50# offset paper every month. Would be glad to give it away, rather than pay to fill the local land fill. We are located in Northern Michigan.
Thanks
June 30th, 2010 at 10:39 am
Recycling is very very important in order to preserve mother earth.’:”
July 28th, 2010 at 3:20 am
we should always think about recycling our waste products to help the environment.,`.