The chief executive of US major company Waste Management has warned that recycling is becoming increasingly unprofitable.
Speaking to TV station CNBC, Waste Management president and chief executive David Steiner said that paper and plastic prices were having a major impact on his business and that the company did not make any investment in the last year.
A strike and slowdown by dock workers at US west coast ports is making it difficult to export material to China, while the fall in the price of oil has had an impact on the price of plastics.
But he warned that low paper prices were also having an impact, especially as it was difficult to send this to China due to the strike and falling demand from the Chinese.
Secondary Commodity Markets 2015 – the conference for buyers and sellers of recyclable materials takes place on 3 March 2015 in London. Find out more here
He said to CNBC: “Lower oil prices affect plastics recycling. The biggest thing we recycle is fibre: paper, cardboard. And what you have got going on right now is the slowdown of the ports on the west coast.
“So you can’t move product overseas, and you have got a slowdown of demand from China. So, paper prices are at multi-year lows.
“It’s really leading to making recycling not profitable. We are the largest [waste management] company in North America and we can’t invest if it’s not profitable.
“So, we have got to figure out what we need to do in our business to make it long-term sustainable.
“Two years ago we were investing anywhere from $100 million to $400 million a year in recycling. Last year we invested virtually nothing, just maintenance.
“For the first time since recycling really took hold in the early 90’s, last year, recycling rates actually went down in the United States, and they went down because you can’t extract the value out of the material.”
Watch the interview at http://video.cnbc.com/gallery/?video=3000354516