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Economic crisis hits city recycling

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Recyclers and scrap dealers now have large amounts of material they can sell only at a steep loss. Some companies with warehousing are stockpiling in the hope that higher prices will soon return, but others with municipal contracts that bind them to continue picking up scrap, are unloading inventory for prices a fraction of what they would normally receive.

Even those firms willing to unload scrap at a loss are not finding buyers. "When you can't move material at all, the anxiety comes from, where are you going to put this stuff?" says George Sidles, recycling manager for Seattle.

In the past, many trash and recyclables collectors would simply landfill the waste. But rising land filling costs and state and contractual prohibitions now mean recyclers must wait for better times or simply absorb losses.

Scrap prices for both paper and metals hit record highs last summer.

"This decade had the highest demand and the best pricing ever," says Jerry Powell, editor of Resource Recycling magazine. "But if you look at actual market growth, all of the increase is due to foreign demand, and 80 to 90 percent of that is due to China."

Chinese demand ahead of the Olympics and heightened worldwide spending spurred demand for raw materials from the US. So much so that the price of shipping to Asia on once empty shipping containers suddenly surged.

But when prices began falling, international buyers fled, says Robert Stein, a vice president at Alter Trading Corporation, a large scrap metal recycler based in St. Louis.

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