Why a drop in commodity prices won’t stall recycling efforts

Even with less money coming in from recycling, construction firms accustomed to sorting trash still find the practice as good as gold.

Construction firms are earning less cash from recycled materials, such as metal, paper and concrete, because prices fell dramatically in recent months.

But Jeffrey Gruhn, a senior project manager with Minneapolis-based Mortenson Construction, said most owners want to see green-building techniques, such as recycling, used on their projects.

“Even if (owners) don’t ask for (recycling), we’re pushing it,” he said. “Our owners understand it’s the right thing to do.”

Don Lawrence, senior project manager with La Macchia Group, said the Milwaukee firm doesn’t need to make money on recycling because the process is cheaper than throwing everything into the trash.

Lawrence said the company recycled concrete and paper for an office building project last year. The company had six segregated waste containers on site, he said.

“The cost for waste disposal turned out to be less,” Lawrence said.

Several months ago, recycling looked like an easy way to make extra money on a project because commodity prices were at all-time highs.

But the price for scrap steel fell to as low as $90 per gross ton after trading near $550 per ton in July. Similarly, the prices for copper fell from $4 per pound a few months ago to $1.06 per pound in January, according to various news reports.

Ed Faherty, owner of Platteville-based private hauler Faherty Inc., said the drop in commodity prices led to a drop in new customers but did not hurt hauling among existing customers.

He said construction firms accustomed to recycling will continue to do so regardless of price. But he said there is less incentive for contractors unfamiliar with the practice to start recycling.

“A lot want to see what it’s going to cost,” Faherty said of potential customers. “They want to save money or have it not cost anything. If it’s a break-even or maybe to pay a little extra, it’s a harder sale.”

But Jenna Kunde, executive director of WasteCap Wisconsin, a Milwaukee nonprofit that teaches builders how to recycle, said recycling will continue to grow because the practice is part of the larger concept of sustainable building.

She said making money on recycled materials is an added, but unnecessary, incentive.

“Most companies are still going to recycle”, Kunde said. “If they save money or make money, it’s all the better.”

Jim Birmingham, who works as commodity development manager for Waste Management Recycle America, an arm of national hauler Waste Management that connects recyclers with firms that buy recycled materials.

Lawrence said he believes contractors eventually won’t have a choice of whether to recycle.

“I think it is actually going to become law,” Lawrence said. “Twenty years ago, nobody really thought of recycling cardboard and glass. You’ll see more and more in the construction industry that we’ll have to be separating our waste.”

— Janine Anderson