Anchorage Daily News

Even as the rest of the economy tanked this summer, recyclers were riding high on a cushion of relatively lofty prices. But in the past three months, that cushion has disappeared. Prices for materials like used paper and scrap metal have nose-dived and recyclers across the country have been left scrambling.

Alaska is no exception with recycling companies from Anchorage to Mat-Su to Kodiak laying off employees, stockpiling materials and otherwise trying to get creative about cutting costs while they hope for the markets to turn around.

"It's outrageous," said Bob Tenge, a manager with the Smurfit-Stone Container Corporation, which runs the Anchorage Recycling Center off Dowling Road.

The company has laid off three employees at the center, he said. It has also started charging haulers, like the city's Solid Waste Services, $50 a ton to drop off materials, a service that was previously free.

Tenge said he had no choice. Prices for some materials like mixed paper have dropped so fast they are selling for a fifth of what they were two months ago. He said he's been shipping out materials like paper at a loss just to make room at the company's plant.

A few miles away at the Alaska Metal Recycling plant on King Street, senior buyer Chris Fedele said he's had to make similar cuts in his staff and significantly drop the prices he pays for those bringing in metals like copper, nickel and aluminum.

Two months ago, he was paying $3 a pound for copper, a price so high there were reports in the Lower 48 of people stripping electrical lines for the copper wire inside. Now Fedele said he's shelling out, at best, 50 cents a pound and that's for the top-of-the-line super shiny stuff, he said. The plant, which grinds up materials like junk cars and scrap iron, ships most of its material overseas, and the markets there have simply dried up, he said.

"For the most part right now, everything is kind of at a standstill."

Those who deal in commodities are used to the up and down swings in the markets, but the latest price plunge has amazed even longtime observers.

"It's a disaster," said Mark Arzoumanian, who edits a weekly newsletter known as the Official Board Markets, or "Yellow Sheet," that tracks prices for paper products.

Arzoumanian said prices aren't at record lows but the drop-off is the fastest he's seen in 20 years of editing the newsletter.

Since September, the price for mixed paper in the Pacific Northwest, to which most Alaska material is sent, has plunged from $110 to $10 a ton. Cardboard prices have dropped from $100 a ton to $35, and old newspapers from $155 a ton to $75 a ton.

The picture isn't any better on the metals side. Aluminum, which was selling for $1.07 a pound last year, is down to 65 cents a pound, according to Bob Garino, who tracks commodity prices for the Institute of Scrap Recycling Industries Inc., a Washington D.C.-based, nonprofit trade organization.

Other commodities like nickel are even worse off, down to 71 cents a pound from more than $4 a pound last year, and steel, which was trading for $524 a ton in July, just closed at $185 a ton, he said.

Both Garino and Arzoumanian pointed to a number of factors for the downturn, including the recession in the U.S. and a drop-off in demand internationally for recycled materials.

Metals, in particular, had been riding high because of growth in the so-called brick nations -- India, China and Brazil, said Garino. But those economies took a dive at the same time the U.S. market started to decline.

"Now we're in a synchronized downturn," he said.

The same is true in the paper markets, said Arzoumanian. China is one of the biggest importers of paper products. Mills there churn out cereal boxes and cardboard containers that are sent back to the U.S. But the importers slammed on the brakes this fall when it became clear demand for the finished paper products was slacking off, he said.

That had a ripple effect on the market. Nationwide, there have been reports of cities shutting down recycling programs and companies trying to get out of recycling contracts. Garino said he's heard lots of horror stories from within the industry, including ships arriving at ports in China or Korea only to have the buyers refuse to pay.

For now, there are no such horror stories in Alaska.

Alaskans for Litter Prevention and Recycling did recently announce it was shutting down a glass-recycling program in Anchorage but said that was due to a drop in demand in state for glass products and not so much the drop in prices nationwide.

Although there have been no big changes, some Anchorage curbside recyclers will be affected. Alaska Waste recycling coordinator Katy Suddock said beginning next month, the company will increase the fee it charges its roughly 5,500 curbside recycling customers from $6 a month to $9.75 a month. The increase is needed to cover the surcharge the Anchorage Recycling Center is charging of $50 a ton to drop off materials, she said.

Mark Madden, director of Anchorage's Solid Waste Services, said the city also drops off at the recycling center and is having to pay the same surcharge.

But, he said, the city doesn't plan to raise its prices or make any changes at this point to the program. The total cost to the city of paying the $50 a ton fee is about $2,500 a month, which works out to about 60 cents a customer, he said.

Meanwhile the recyclers say they are trying to get creative and crossing their fingers in hopes the markets will soon improve.

In Kodiak, Rick Pillans, who runs Threshold Recycling, said he's trying to find more local uses for his products, including possibly packaging paper into fiber pellets to use for heat and fuel.

Meanwhile, near Palmer, officials at the small nonprofit Valley Community for Recycling Solutions said they are still giving egg crates to local chicken farmers, packing peanuts to shipping stores and delivering newspapers to an Anchorage company, Thermo-Kool of Alaska, which shreds it for use as insulation,

They are stockpiling the rest of the material. And, in a space-saving twist, executive director Molly Boyer said they are using their own 4-foot square bales of recycled material to create a temporary building to house material like paper, which needs to be protected from the wind and rain.

Despite the innovation, she and the other recyclers all said they hope the markets decide to go on the upswing sometime soon.

Find S.J. Komarnitsky at adn.com/contact/skomarnitsky or 352-6714.

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