March Markets

So much for domestic or export markets leveling off, or even slowing down. March markets came out with prices reflecting supply and demand exceeding the pre recession prices. Cardboard and certain other types of paper for recycling shot up $30.00—37.00/ton.

What does all this mean? It means that the lack of consumer spending trickles down to the lack of scrap cardboard and other grades, and the demand by off shore markets, and certainly some domestic mills is causing this huge uptick. It appears that the domestic markets are stronger than the export markets, actually causing these off shore buyers to raise their prices to keep up with our demand. Let’s not forget the weather, especially in the East and South, more than hampering harvesting trees for their fiber.

So, let’s hope that spring weather is conducive to tress harvesting, supply becomes a bit more available, and things get back in balance. If not, I fear that when the markets cool, these astronomical prices could tumble in a bit of a free fall.

Bad Luck – Incompetence or Sabotage; We report, You decide.

It is long past time that someone needs to do an in-depth review of SWACO’s high profile development projects. Most if not all of the projects appear to be stalled. SWACO has ceremoniously broken ground, issued press releases, posted picture on their website, distributed newsletters and hyped the heck out of all of these projects. If you buy all this hype you would think great things are happening. The reality is none are operational to any extent reducing what is going to landfills or producing significant energy or creating jobs. It is either a most improbable string of bad luck or SWACO is totally incompetent as developers or being more cynical they have methodically “killed” off these projects for reasons only known to them. We think the truth is a little of the last two. Whatever the reason, SWACO has effectively killed off or delayed these projects at great expense to the taxpayer. In chronological order:

Grossman Recycling

SWACO harassed this recycling company, threatening it with breach of contract, etc. for doing what SWACO wanted to do; for what SWACO is supposed to do: RECYCLE. An unfortunate fire ended the opportunity for this company to grow at the SWACO site; but, did SWACO lend a helping hand?.....No, they continued to harass Grossman until they effectively drove the company away.

Kurtz Bros. and Ohio Mulch

Here again SWACO has a history of harassing their own contractors to the point of breaking the deal. The feud between these companies and SWACO spilled over into the public spotlight briefly, but was quickly covered in a pile of compost. Why does SWACO do this harassment? SWACO says to save money; they take a holier than thou attitude of being good stewards of the taxpayer’s money….but there is more to this than is visible…..one needs to dig into the emails to find the rest of the story.

Rastra

In SWACO style there was there was a big ground breaking celebration for this innovative “green” building material at which they gave away polystyrene ice chests as souvenirs (find out how much that cost and what they did with their over-purchase). They made a really big deal about this. Now, less than a year later a $2 million building sits empty and idle at the former Trash Plant site. SWACO is in a lawsuit with Rastra. There is little hope this project will get back on track. Meanwhile, SWACO pays taxpayer dollars for an empty building. The highly touted job creation project to recycle plastic and save all that landfill space is dead and no one seems to care. Who is paying back the loan to the State of Ohio? How does SWACO intend to proceed? What are they going to do with a brand new building that is sitting idle at the site of the former Trash Plant? How ironic is it that SWACO knocked down the former Trash Plant that was losing money and then built a brand new multimillion dollar building in its place that is losing money.

Green Solutions Technology

This is a project with the idea to clean up the water from the landfill that SWACO currently sends to the City of Columbus Wastewater treatment plant. This was the subject of a recent highly publicized announcement that SWACO and Green Solutions was the recipient of multiple millions of job stimulus funds.

Here is what is said on SWACO’s website:

SWACO’s Board of Trustees announced the institution of a new Emerald’s category for the 2009 awards. “The Chairman’s Award” was presented to Green Solutions Technologies. Trustees Chairman Bradley Frick presented the award to company founder Brad Malatesta. “Brad is a green pioneer who is cleaning up our environment and bringing new jobs to Central Ohio through his ground breaking technology.” Malatesta was instrumental in helping bring federal stimulus money for a revolutionary onsite water treatment plant at SWACO’s Franklin County landfill. He is also helping to install a first-of-a-kind treatment facility at Port Columbus that will recycle the de-icing fluid used on airplanes.

The reality is the project is stalled. Why? What is going on behind the scenes? Will the project ever come to fruition? The Chairman of the Board of SWACO personally gave the company an award for bringing federal stimulus money for a water treatment plant at the landfill. Where is the money and when are they going to build this thing. Someone needs to get the facts out on the table.

It is believed that this project is also “dead in the water” and that $5 million of federal job stimulus funds are literally have been flushed down the drain by SWACO.

Green Energy Center – Firmgreen Fuels

This is another award winning project. Here is what is said on SWACO’s website:

SWACO’s Green Energy Center has received a “Project of the Year” award from the U.S. EPA. The honor was presented at the U.S. EPA Landfill Methane Outreach Program (LMOP) annual conference in Baltimore January 13, 2009. The Green Energy Center transforms gas from SWACO’s Franklin County Landfill into Compressed Natural Gas (CNG) for vehicle fuel as well as energy for a 250 kW micro-turbine which provides electricity for the Grove City, Ohio facility. The Center is a public-private partnership with FirmGreen Inc.

This project went “live” in September 2008, almost a year ago at a huge ribbon cutting ceremony. The project is supposed to take landfill gas, clean it to high purity natural gas with the idea of selling the gas and making some electricity. Here we go again with a job stimulus project which would never have been built or is it feasible without a subsidy from the federal government to the tune of almost $2 million. But, what is actually happening to the gas that is being cleaned by the highly touted Green Energy Center. Have SWACO produce data, charts, graphs, etc. for how much gas leaves the landfill, enters the Green Energy Center, is cleaned then turned into CNG that is sold into the marketplace. How much gas is recovered? How much is sold? And how much is simply burned in their flare with no energy recovery. The belief is that almost one year after their grand opening; they are still burning with no energy recover most of the gas. If anyone actually calculated the total real cost of the gas that is produced and used it would be exorbitant compared to conventional fuels. This is in part because they never figured out how they would cost-effectively distribute the gas.

2010 Slow Recovery

2010 has started off with a increasing lack of supply for the demands that the paper and plastic consumers are placing on them. Prices have moved up proportionately, and while we do not anticipate huge jumps like we saw last year, we do see a steady recovery with few bumps along the way.

When you combine the demand with our weather most of the country has experienced which hampers collections and overall generation, it is fairly easy to see how this is causing the shortage. The general economy, improving manufacturing, greater distribution, increased recycling programs that are now sustainable with the help of higher prices and markets and some shortages of export containers, all add to improving markets.

This will not continue and could flatten out over the next few months, but with the adverse supply factors, markets should remain stable. While we have seen fairly steady improvements and the re-capturing of pricing by demand, let’s keep in mind that we still remain far below the highs attained in the late months of ’08. Also keep in mind that those markets were unrealistically high, and doubtful we will be back to them any time in the near future.

The economy has a very long way to go in recovery. These improvements we’ve all seen are wonderful, but with hundreds of thousands of people out of work, many markets way off the pace such as housing and the failures that have happened, and will continue this year, it will be some time for stability.

On a local note, I would be remiss not to mention that our solid waste authority, SWACO who continuously seeks the publicity and hoopla of recycling but never, or at least rarely mentions their failures, has now announced that their local, highly publicized JITTERS program will end in March of this year. Interesting that they didn’t have the same hoopla with this failure as well as four other private companies that unfortunitly failed or never got off the ground after SWACO promised the moon. How long will Columbus put up with all this? It is really sad.

Christmas Season Recycling

As we near the end of 2009, I think it best to simply say this year was primarily flat in terms of pricing and marketing for scrap paper and plastic. Sure there were some upward trends and certainly some recovery from a year ago, but overall most of the supply and demand is in decent balance.

Various regions of the country saw somewhat different trends. If it was weather in the Southeast shortening the supply of OCC, a slowdown of exporting out of the various ports or the overall doldrums of the economy, there just wasn’t a lot of excitement.

There are mills in the Northeast and some in the Southeast who are a bit concerned over supply and are building inventories. Do the suppliers have the product? We’ll know soon enough after the Christmas season what comes out or not because so much is based on what you and I buy retail and recycle the cartons.

Our company made major strides coming off of a year of re-building after our fire. With extra efforts and working double time, we were able to survive, increase our customer base and yes, increase our overall volumes as a result. We overcame the attrition of not our customers, but their volumes, and are sitting in the best position we have been in years.

All of us at our respective companies wish everyone a healthy and happy holiday season.

The Perfect Storm

Some call the current markets for scrap paper the “perfect storm”. The calm before what could amount to rapidly rising cardboard and other grades early next year. Actually, things have been a little quiet for months. We have gone out of our way to create alternative markets for all of the materials being offered to us, keeping them out of land fills. Alternative markets don’t necessarily follow conventional supply and demand markets, so the opportunity to increase our business and reduce customers hauling and land fill costs are great.

Our sister company, Industrialbags.com is trying to increase their volumes for supplying industrial and commercial plastic bags, lumber wrap and various films. We prefer to work only with domestic suppliers and manufacturers so we have to be quite creative to offset foreign pricing, which always seems a little lower, as is their quality.

Give us the opportunity of working with you on marketing any difficult to market item(s), complete destruction of any materials or supplying most poly bags and wraps.

Rollercoaster Ride

What a roller coaster market we seem to be in. Less than a month after most grades of paper and plastic continued climbing, some have cooled off, while the unexpected ones continue to rise. It is almost impossible to forecast, except to possibly say we continue in a tough economy, there has been some improvements but we have a long way to go.

Markets appear to be in balance between supply and demand, which is a treat if we think back to a year ago and the free fall.

Local efforts to re-build on recycling projects that has taken years to put together and were hurt with last year’s market downturn, are once again in jeopardy, but this time because of a small item called flow control.

In Columbus we have a board of trustees that controls the agency SWACO, our solid waste authority whose revenues come from tipping fees, in other words, dump charges on every ton of garbage, recyclables, etc. that gets into the landfill. Years ago they permitted, through waivers, haulers and recyclers to haul trash out of county for processing, recycling and some land filling. With the economic downturn they claim their revenue has dropped and they may be bankrupt by the end of next year. What do they do, send notices out that the waivers will end by 12/31/09. They want more trash!!

There isn’t one member of the board or in an executive position at SWACO with a solid background in hauling, recycling or operating a private business. They only know how to play the political game saying “we are SWACO, we can do what we want”. Don’t we all wish life was that easy?

September Tital Wave

Just as many of us thought supply and demand were heading back into balance, September rolls in like a tidal wave of demand. Almost all paper grades went up from $5.00 to $20.00 per ton, a significant increase, the higher end grades went up as much as $50.00 per ton.

What is this showing us? With some of the exporting slowing a bit due to customs becoming far more stringent, especially in China, along with balances more in line, our domestic mills are becoming stronger and their demand is increasing. What does this mean? Could it be that the economy is finally making a turn for the better? Keep in mind that waste paper goes into making cartons and other paper products that will be in demand just a few months from now. Therefore, might many mills be seeing their orders increasing based on real demands in the near future?

I would be remiss to not acknowledge that our company, Grossman Environmental Recycling, Inc. just won The Best Recycling Company in Columbus, something each of us are very proud of. We thank Columbus and the readers of C.E.O. Magazine who was responsible for this voted award.