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San Fernando
Thursday, Sep 21, 2023


WADE DANIELS Staff Reporter The economic downturn in Asia has meant topsy-turvy stock and bond markets. But it also is wreaking havoc with a commodity that doesn’t always come immediately to mind: waste materials. Scrap metal, cardboard, paper and other recyclable goods have seen their per-ton prices plummet this year, largely due to dropping demand overseas, according to Alex Dmitriew, a manager at the Sun Valley-based Crown Disposal Co. Inc. “Prices have been going down fast,” Dmitriew said. “It’s a direct result of the crisis in Asia. It’s been hard to make a profit in that part of our business.” Since early August, scrap metal has dropped by about 50 percent to $30 a ton, and in the past year cardboard has slid to some $45 a ton from nearly $80 a ton. Ken Scrobeck, owner of Kenco Paper Recycling in North Hollywood, said his profits have plunged by about 40 percent this year. That’s about how much the per-ton price of paper he collects from print shops and other suppliers has fallen. Meanwhile, the per-ton price of cardboard has dropped by 70 percent. The company resells about 40 percent of the paper it collects to countries like Japan and Korea, where orders have dropped sharply since their economies plunged this year. “It’s cut into profits big time,” Scrobeck said. “The only way to cope with it is to cut the amount I can pay people for the paper which makes things worse, because fewer people come in to sell their paper.” The slackening overseas demand for recycled goods is not the only problem cutting into profits for recyclers, Scrobeck said. It has become increasingly difficult to compete ever since the 1989 passage of Assembly Bill 939, which requires every jurisdiction in California recycle at least half of its waste by 2000 or face $10,000 a day in fines, he said. Since then, the emergence of curbside collection programs has meant dramatic increases in the amount of paper, plastic, compost and other materials that are recycled a trend which may bode well for the environment, but has taken a severe toll on recyclers. “That law has led to a flooding of the market,” he said. “A lot of that curbside paper is stuff that would have come to us.” Other companies, such as Crown Disposable, have benefited from the law by landing city and county contracts to collect materials. However, Dmitriew said that this business, which now brings in a majority of the company’s revenues, has not paid off as handsomely as he had hoped. “A lot of contracts are linked to the price of the commodities, which have been going down since this whole thing started,” he said. For example, one of the commodities Dmitriew has long dealt in is wood chips, which are derived from scrap wood it collects and sold to energy plants for fuel. Thanks to the state’s recycling mandate, there is now such a large supply of wood chips on the market that the price per ton has decreased by more than 50 percent in the past three years. “The price dropped dramatically, and there is so much product available that the buyers are much pickier,” Dmitriew said. “If they see any contamination in a load of chips, they reject the whole thing.”

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