Recycling firms backpedal after price crash

Sarah Butler
The Guardian, Monday 29 December 2008

Recycling companies are beginning to stockpile raw materials as local councils struggle to off-load materials amid falling prices.
Closed Loop, one of Britain's biggest plastics recycling firms, is planning to increase its stocks of unwanted bottles by at least 5,000 tonnes and has stepped up its operation to full capacity of 3,000 tonnes a month to prevent a collapse in the relatively new industry.
The price of mixed plastics has nearly halved in the past year as some far eastern customers have stopped buying. But prices for glass and sorted plastic such as polyethylene terephthalate and high-density polyethylene have held up, according to the government-backed Waste & Resources Action Programme (WRAP).
Falling prices have resulted in some councils having trouble selling their recyclable waste. The Local Government Association (LGA) said that three-quarters of its members had been affected by a fall in prices of recycled materials. A recent survey by the LGA found that 5% of local authorities were having to store recyclable materials for longer than usual.
Closed Loop has leased four acres of land adjacent to its Dagenham factory, where it will store an additional 5,000 tonnes of plastic waste. The company is also considering storing a further 1,000 tonnes on the site of its second factory, which is under construction in Deeside.
Chris Dow, the chief executive, insisted he was not capitalising on the collapse in prices to stockpile cheap raw materials but was just keen to keep the system rolling.
Although the value of the kind of plastic he recycles had more than halved to about £50 a tonne, he insisted he would pay "a fair price".