Each morning Tian Wengui emerges from the home he makes under a bridge here, with two large sacks slung over his shoulder. Through the day, and well into the night, he scours garbage cans for soda bottles, soy sauce containers and cooking oil jugs. Selling the refuse to one of Beijing’s ubiquitous recycling depots, Tian can earn US$3 on a good day.
But good days are getting harder to come by.
Since Tian migrated from the province of Sichuan, the multibillion-dollar recycling industry has gone into a nosedive because of the global economic crisis and a concomitant fall in commodity prices. Bottles now sell for half of what they did in the summer.
PHOTO: NY TIMES NEWS SERVICE
“Even trash has become worthless,” Tian said recently as he made his way to a collection center, his sacks nearly bursting.
The collapse of the recycling business has affected people like Tian, the middlemen who buy the waste products and the factories that refashion the recyclable waste into products bound for stores and construction sites around the world. US and European waste dealers who sell to China are finding that their shipments are being refused by clients when they arrive in Asia.
The ultimate victim may be the environment, already overrun with enough trash in places to threaten people’s health, now further burdened with refuse that until recently would have been recycled.
The effect is being felt acutely in China, the world’s largest garbage importer. The US, for example, exported 10.5 million tonnes of recovered paper and cardboard last year to China, up from 1.9 million tonnes in 2000, the American Forest and Paper Association said.
Because Chinese consumption is far less developed than the West’s, more than 70 percent of the materials that feed the country’s recycling industry must come from abroad, said Wang Yonggang, a spokesman for the China National Resources Recycling Association.
“Chinese tradition is all about saving and being thrifty,” he said. “People here would rather have things repaired several times before abandoning them.”
The drop in commodity prices was so rapid that in a matter of weeks last fall container ships carrying used railroad wheels and empty dog food cans arrived in Chinese ports worth far less than they had been when they departed Newark, Los Angeles, or Rotterdam.
“Everything was moving along just fine until October and then we fell off a cliff,” said Bruce Savage, a spokesman for the Institute of Scrap Recycling Industries, a trade organization that mostly represents US waste processing companies.
The US exported US$22 billion in recycled materials to 152 countries in 2007. Now the organization estimates the value of US recyclables has decreased by between 50 percent and 70 percent. Western dealers say they are grappling with a 50 percent drop in prices and mounting stockpiles whose value in many cases continues to sink.
To make matters worse, Chinese importers have been demanding to renegotiate contracts drastically downward. In some cases, they are refusing to accept shipments they already have a contractual obligation to take.
“There are still many containers full of waste sitting at the port in Hong Kong,” Wang said. “It’s hard to say when they’ll be picked up.”
According to the Chinese recycling association, a tonne of copper scrap now sells for US$3,000, down from more than US$8,000 in 2007. Paper has sagged by as much as 80 percent.
The tough times are hitting Chinese recyclers at every level. Gao Zuxue’s family runs a small collection depot in central Beijing.
Standing in a dimly lighted, half-empty room that is usually packed with broken radiators, soda bottles and newspapers, Gao said he earned nearly US$450 a month in the boom days of 2007. Now he is lucky to make US$80.
“People aren’t selling their junk to us because they think the price is ridiculous,” he said.
Up the chain, many manufacturers that process imported recyclables are finding it difficult to stay in business.
“My goal is just to survive,” said Luo Guoliang, an executive at the Yang Xin Long Fu Co in Shandong Province, which makes polyester and polypropylene filaments for fabric and rugs, all of it recycled material.
Luo said his company imported a third of its plastic from abroad last year, paying US$1,200 for a tonne of shredded plastic bottle flakes. While the company now pays half that amount, he said many of his domestic suppliers had closed, making it difficult to find the raw material for production.
Yet, in China’s current malaise, the company has bigger concerns. Fearing instability, the local government has forbidden factories from laying off workers, even as sales evaporate.
Environmentalists and recycling experts worry about the environmental impact of the recycling slump. With Western curbside recycling programs becoming less profitable, local governments are being forced to re-examine their recycling programs as they struggle to balance budgets, which in some cases has meant that office printouts and soda cans, once exported, go to landfills.
“It used to be that recyclers would pay governments for these goods,” said Bruce Savage of the Institute of Scrap Recycling Industries. “But now governments have to pay recyclers. What was once a revenue stream is now a cost to cities.”
While recycling executives say prices have bottomed out and in some cases have improved slightly — for copper and plastics, for example — they are bracing for tough times ahead as the global economic crisis wears on.
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