11/2/2015
The Perfect Storm: e-Waste recycling costs skyrocket!
The e-waste industry, or as others refer to it as the e-scrap or electronics recycling, appears to be sliding into the danger zone and many industry experts agree…it’s a perfect storm and it is causing recycling costs to skyrocket!
In other words, the good-old days of getting paid for scrap computers are essentially gone.
For businesses and consumers there is real cause for concern. One owner of an R2 Certified e-waste recycler commented recently, “as a recycler, we depend on most of our return to come from the back-end or recyclables and as these values continue to decline we will soon be faced with the dilemma of adding and increasing recycling fees, as well whether we will continue to purchase e-scrap.” Having fewer recycling options could cause further rate increases and result in an increase in illegal dumping or exports.
Contributing to the decline of e-waste and commodity values are a number of issues such as China’s decreased demand for materials, speculation on rising interest rates, instability of fuel prices and an overvalued stock market. The net results are increased volatility, rapidly falling commodity prices and increased costs of recycling.
Digging deeper, much of it stems from plummeting iron (steel) rates. This is significant considering a steel chassis on a computer or server make up around 80% of the weight and generally most of the value in proportion to the weight. In just the past month iron ore values decreased by 12% and it has decreased 45% over the past year*.
Shockingly, recycled cardboard yields a higher value than steel!
Other precious metals like gold are dropping daily as people regain confidence in the stock markets and look for more return in an interest bearing investment. China, again, seems to have a role in this too by manipulating the market. Copper prices play a large factor in e-waste values and it is down almost 30% over the last year. Commodities values, overall, continue to trend negatively.
It seems like the perfect storm is here to stay for a while. Forecasts for the commodity markets are bearish and experts suggest it could be years before rates rebound. So, businesses and consumers should be prepared to weather the storm and get ready to pay more to recycle their e-waste.
*Source: (Iron Ore Sinks Deeper as China-Demand Fears Grow. http://www.wsj.com/articles/iron-ore-sinks-deeper-as-china-demand-fears-grow-1446118382) and (infomine.com the 52-week high of $92 has fallen to a low of $51/ton)
