West Coast Recycling Moves Ahead

Recycling is on the move on the West Coast of the United States. California is pushing its recycling rates up higher due to a six-year-old waste diversion bill and through the efforts of a well-funded waste management board, although the court rulings against flow control for municipal solid waste are challenging state recycling efforts.

And the state of Washington, where paper is king, is developing such strong markets for post-consumer PET and HDPE resins that material is being imported from other states to feed the demand.

On the industrial side, ferrous and nonferrous scrap from yards up and down the coast continue to be shipped mostly overseas to Pacific Rim countries like Japan, China and Korea, from ports such as those in Oakland, Calif., and Portland, Ore., and there is currently some price softening.

"We go the way export prices go, and right now those prices are softening for all grades," says one local scrap metal dealer.

Alan Ratner, executive vice president for SIMS-LMC Recyclers, Richmond, Calif., says that the ferrous market is definitely flat right now and drifting lower, both domestically and overseas.

"There is still good volume in the export market, but the market has dropped off somewhat," says Gary Schnitzer, executive vice president and general manager of Schnitzer Steel Products Co., Oakland, Calif. "We are expecting a push again this winter." Schnitzer also expresses concern that there is more competition for scrap in the area, forcing his company to search further out for the material it needs.

Dennis Bloch, vice president and general manager of M. Bloch & Co., Seattle, agrees that the ferrous scrap market is softening. "I would have thought that going into the winter months that prices would pick up, but they have not, and right now they are off about $3 to $5 a ton."

Bloch also echoes the sentiment that there just are not many domestic buyers in the region. "Schnitzer has its Cascade mill, Birmingham Steel has a mill and The David Joseph Co. controls all the rest. It really limits us and it just seems like it is becoming harder to compete. I think scrap is plentiful – the flow pulsates up and down – but you still have to find an end market for it."

The scrap market was firm during the middle of the year, according to Michael Buckley, assistant vice president of nonferrous metals for Toyota Tsusho America Inc., Los Angeles.

"Copper, brass, aluminum – all were very strong because a lot of brokers were speculating about the China market," says Buckley. "Now it is very slow because of that speculation. Not many extrusions are going to China at the moment. Plus, the Japanese are consuming less scrap metal because of the decrease in auto production."

One of the other reasons that ferrous and nonferrous scrap is making its way overseas is because of low shipping rates and prompt payment. "Right now, it’s cheaper to ship overseas, than to the East Coast," says Buckley. "Especially with stainless steel scrap that has to be shipped to either Chicago or Pittsburgh. Also, most domestic accounts are net 30 days, whereas for overseas shipments we pay cash first, then the material is shipped. So, the supplier is in the driver’s seat, not the buyer."

On the customer side, Hiro Miyakawa, vice president of purchasing for TAMCO, Rancho Cucamonga, Calif., which operates the only minimill in California, says that the export market for scrap is definitely starting to slow and prices overseas are softening. "That, of course, is good for us," he says. "Prices have already dropped $20 a ton to $167 a ton, and we expect some more softening."

As for domestic competition for ferrous scrap, Miyakawa says, overall, the southern California market is "very quiet," although it may not last long as other mills in nearby states are beginning to get more aggressive in obtaining feedstock. Also, North Star Steel, St. Paul, Minn., is building a new minimill in Kingman, Ariz., along Route 66 on the California border, and that should heat up competition even more. TAMCO’s annual capacity is approximately 500,000 tons a year.

California Assembly Bill 939, passed in 1989 and enacted in 1990, requires the state to reach a solid waste diversion rate of 25 percent this year and 50 percent by the year 2000.

"We are on track with that law," says Lanny Clavecilla, spokesman for the California Integrated Waste Management Board, Sacramento. "Some municipalities are above that rate, and some are below, but the average is on target. So, we are directing our planning strategies toward achieving that 50 percent by 2000. It’s a big effort, and we want to create more markets for all types of recyclables."

Part of the effort has been the establishment of 29 recycling market development zones to sustain recycling markets in the state. These are areas where companies can get special treatment and tax breaks if they are involved in recycling.

As for the state as a whole, CIWMB last year collected $75.6 million from tipping fees, a tax on oil sales and a scrap tire disposal fee charged on every new tire sale. "Tires are one of our biggest problems in the state," says Clavecilla. "Each year we generate more than 29 million of them, and a lot of money is spent trying to find markets, and cleaning up existing tire dumps."

The market situation and the challenges faced by California are representative of those faced by other states, he continues.

"It all boils down to developing markets for recyclables," says Clavecilla. "If there is a market, then everything else would take care of itself. The absence of flow control also hurts. Trash is hauled out of the state by the trainload, and it doesn’t solve our problem. It doesn’t force the issue of recycling."

The lack of flow control in California has already had an impact in San Diego County which had to shut down a new, $138 million materials recovery facility. The main reason that the MRF was closed was because it could not get enough garbage and recyclable materials to sustain operations.

"Flow control basically killed it," explains John Theroux, recycling specialist for the San Diego Environmental Services Department. "Haulers simply could get lower tipping fees elsewhere."

Now, the area has to rely mainly on curbside recycling efforts, and efforts from the large military population in the region. Because of the closed MRF, recyclables from curbside programs are collected and sold to private processors.

"Right now, we are taking in about $10,000 to $12,000 per month, all of which goes to the city’s park system," says Theroux. "We used to get only $1,000 per month, but because more people are recycling, and because of higher prices for recyclable material, we were able to increase that figure by tenfold; and collection has increased by 40 percent. We are now getting more than $1,000 for a ton of aluminum whereas before we only got $300. Newspaper topped out at $202 a ton here not too long ago; now it is currently at $115 a ton, which is still pretty good."

San Diego currently has an agreement with the Navy to use a landfill on the Naval Air Station at nearby Miramar. All the bases have aggressive recycling managers, according to Theroux, but it’s hard to get the Navy in general to think about recycling and landfilling when they can dispose of material for no charge at their own landfill.

One promising area is a cooperative effort with the military to "deconstruct" buildings, according to Theroux.

"It’s a business that the military has not considered before," he says. "About 60 percent of all the construction and demolition debris in San Diego is at the bases. The military always seems to have a lot of construction projects going on – old buildings being torn down and new ones going up. Right now we are working on getting funding from the CIWMB for a project at Fort Ord to implement C&D recovery and deconstruct these old buildings instead of landfilling the material from them."

Up the coast in San Francisco, Dave Assmann, public outreach coordinator for the city’s solid waste management program, says that San Francisco has had voluntary curbside recycling since 1991. Today, he says, the city’s recycling rate runs about 50 percent for residential and 20 percent for commercial customers.

"We still have much work to do on the commercial side because that represents about 70 percent of the waste generated here," says Assmann. "Mainly, we are trying to set businesses up directly with recyclers by soliciting them and delivering educational material."

Some of the challenges of recycling in San Francisco include trying to properly collect recyclables in a city that has a large urban population in close living quarters. In Chinatown, for example, recycling bags have to be used instead of bins to save space at the curbside. Another challenge is outreaching to a population where 42 percent of the people do not speak English at home.

"Of course, we are very happy with the strong markets for recyclables," says Assmann. "With about $6 million coming from the sale of those recyclables, we are able to rebate our residents on their garbage bills. But scavenging in the city is a major problem. We never lost paper before at the curbside, and we are currently experiencing a big drop in recovered paper."

Still further up the coast, David Dougherty, executive director of the Clean Washington Center, Seattle, says recycling is doing very well in the Northwest. He points to programs that have developed markets for recyclables, and which have resulted in monetary savings for residents in the Seattle area – an average of about $100 a year per household in avoided waste removal costs.

"This region has always had the capacity for paper," says Dougherty, "but we have also developed the capacity for plastics, too. Five years ago we had no capacity to use recycled plastics – mainly PET and HDPE. Now it is a different story. Our engineers went to plastic plants and helped them convert to recycled feedstock. The result is that now we have an annual capacity of 12 million pounds of PET and HDPE, 5 million pounds of which is imported from other states, mainly California. So that has worked really well."

Dougherty says that his organization, which is a unique partnership of industry experts and government officials established to find markets for recycled material, wanted to be careful not to convert manufacturers totally to recycled feedstock.

"We do not think that is prudent business," he says. "A manufacturer should be able to adjust between virgin and recycled feedstock depending on price. They simply need to have that flexibility to survive. That flexibility brings competition into the feedstock prices and has a stabilizing effect. The worst thing that could happen is that the manufacturers convert totally to recycled material, and the prices go up so much to where they can’t compete. Then they either go out of business, or never use recycled feedstock again – and we certainly do not want that to happen."

Other material, such as glass containers, is still a problem in the area, says Dougherty, because of its weight and low cost on the market. "We are now are looking at the next five years and focusing on materials such as vinyl, urban wood waste and food. We are also looking at polycoated paper as a feedstock for mills, and we are close to introducing new technology dealing with that material."

Of note, last year the Clean Washington Center was designated by the U. S. Department of Commerce as the National Center for Recycled Technology, a designation of which Dougherty is proud.

"The state of Washington was unique from other states because it did not take a regulatory approach to recycling," he says. "Now, we are working to help other states establish programs like the one we have established here."

Because of its program, Washington currently boasts one of the nation’s highest recycling rates at 38 percent, while having one of the lowest budgets to implement recycling programs at $2 million, according to Dougherty.

The author is managing editor of Recycling Today.