The decreased cost of oil has meant cheaper gas and reasonable heating bills for many consumers.
But for many recycling companies, it has led to a decrease in revenue.
As oil prices drop, so has the price of plastic made with oil.
Bob Anderson, regional business development manager for ReCommunity Recycling, is feeling the effects.
Anderson said low oil prices are affecting revenue for recyclable companies like ReCommunity, which operates in Camden County.
“What I can speak to is that the commodity markets have been at historic lows and we’ve seen dramatic reduction in the value of scrap materials, whether it’s tin cans, which are at a significant low, or plastics,” Anderson said.
Spot prices for oil were about $36 a barrel last week, according to the U.S. Energy Information Administration, compared with $98.89 in 2014 and $108.56 in 2013.
Just a few months ago, Anderson and company said scrap plastic was selling at $2,000 a ton, and now it’s $30 a ton.
Anderson also said his company cannot hold onto the recycled material, especially in New Jersey.
“It’s impossible to sit on it unless you have a big warehouse. The material comes fast and furious and they keep coming every week, and in New Jersey recycling is mandatory and it’s not as if people can stop,” Anderson said. “We’re in a very challenging time in the recycling industry.”
Kim Holmes, senior director of recycling and diversion at SPI: The Plastics Industry Trade Association, said recycling companies should take advantage of the current market and seek out companies that want to work specifically with recycled materials.
“There are good reasons to still use it, and we hope that those other driving reasons are going to be enough to use it while we’re still in this pricing slump and people don’t anticipate that this will be forever,” Holmes said.
Anderson said his experts expect to see the same pricing for three to five years.
He said the company has hired more workers for a better quality product, something buyers are interested in.
“Buyers have higher tolerance with nonrecoverable recyclables, and when demand is reduced you have to produce a higher-quality product,” Anderson said. “So you’re competing against other competitors, so the cleaner your product is then the better chance you have.”
“We surveyed our members and asked why they chose to use recycled content. Cost savings was the No. 1 reason, but another reason was because companies had internally stated ecogoals requested by customers,” Holmes said.
As he and his workers continue to find ways to increase revenue, Anderson still believes there is only so much they can do.
“We’ve pretty much done everything we can internally to prepare the business. Now we are at the mercy of the commodity market,” Anderson said.