China’s Recycling Market Is Sagging  

The NYT has an article on the collapse in prices for materials to be recycled in China - China’s Big Recycling Market Is Sagging.

Each morning Tian Wengui emerges from the home he makes under a bridge here, two large sacks slung over his shoulder. Through the day, and well into the night, he scours garbage cans for soda bottles, soy sauce containers and cooking oil jugs. Selling the refuse to one of Beijing’s ubiquitous recycling depots, Mr. Tian can earn $3 on a good day.

But good days are getting harder to come by.

Since Mr. Tian migrated from Sichuan province, the multibillion-dollar recycling industry has gone into a nosedive because of the global economic crisis and a concomitant fall in commodity prices. Bottles now sell for half of what they did in the summer.

“Even trash has become worthless,” Mr. Tian said recently as he made his way to a collection center, his sacks nearly bursting.

The collapse of the recycling business has affected people like Mr. Tian, the middlemen who buy the waste products and the factories that refashion the recyclable waste into products bound for stores and construction sites around the world. American and European waste dealers who sell to China are finding that their shipments are being refused by clients when they arrive in Asia.

The ultimate victim may be the environment, already overrun with enough trash in places to threaten people’s health, now further burdened with refuse that until recently would have been recycled.

The effect is being felt acutely in China, the world’s largest garbage importer. The United States, for example, exported 11.6 million tons of recovered paper and cardboard last year to China, up from 2.1 million tons in 2000, according to the American Forest and Paper Association.

Because Chinese consumption is far less developed than the West’s, more than 70 percent of the materials that feed the country’s recycling industry must come from abroad, said Wang Yonggang, a spokesman for the China National Resources Recycling Association.

“Chinese tradition is all about saving and being thrifty,” he said. “People here would rather have things repaired several times before abandoning them.”

The drop in commodity prices was so rapid that in a matter of weeks last fall container ships carrying used railroad wheels and empty dog food cans arrived in Chinese ports worth far less than they had been when they departed Newark, Rotterdam or Los Angeles.

“Everything was moving along just fine until October and then we fell off a cliff,” said Bruce Savage, a spokesman for the Institute of Scrap Recycling Industries, a trade organization that mostly represents American waste processing companies.

The United States exported $22 billion worth of recycled materials to 152 countries in 2007. Now the organization estimates the value of American recyclables has decreased by 50 to 70 percent. Western dealers say they are grappling with mounting stockpiles whose value in many cases continues to sink. To make matters worse, Chinese importers have been demanding to renegotiate contracts drastically downward. In some cases, they are refusing to accept shipments they already have a contractual obligation to take.

“There are still many containers full of waste sitting at the port in Hong Kong,” Mr. Wang, of China National Resources Recycling Association, said. “It’s hard to say when they’ll be picked up.”

According to the association, a ton of copper scrap now sells for $3,000, down from more than $8,000 in 2007.

Tin is now selling for $5 a pound, down from $300. Paper has sagged by as much as 80 percent.