Editor's Focus

Summer evokes images of picnics, vacations, days at the beach and evenings at the ballpark.

But during certain summers, the volatile status of the world’s commodities and energy markets can also be revealed. In particular, petroleum refining capacity can be stretched thin by Americans on the go, and the electric grid can be strained to its limits by Americans anxious to stay cool with electric-powered air conditioning.

Volatility is nothing new to those in the recycling industry. Traders and processors of metal, paper and other commodities learn immediately that minimizing losses (and taking advantage of potential gains) resulting from price fluctuations is a vital component of the business plan.

But Americans may have become complacent about the recent lack of volatility in a commodity market that affects every industry—the petroleum market. It has become commonly accepted over the last several years that an oil glut exists, and that stable oil and gasoline prices have been a key contributor to a successful effort to keep inflation in check.

In the ’90s, American business owners (not to mention car and SUV owners) got used to gasoline and diesel fuel prices that were considered a fixed cost—and a nice low “fixed” cost relative to other ledger items such as health insurance and wages.

But the “fixed” cost has reverted to its variable form this spring and summer, as a combination of factors has caused petroleum-based fuel products to leap dramatically in price. The concern for business owners is determining to what extent the ripple effect of higher fuel prices will spur inflation or otherwise affect the American economy.

Perhaps overlooked in the dot.com era is the fact that the American economy is still held together by a transportation infrastructure fueled by petroleum. The Internet and e-mail may help deals get done faster and more efficiently, but the goods sold still have to be shipped from point A to point B. And if the cost of shipping those goods goes up by 50%, eventually that cost is passed on and filters through to end consumers.

While some segments of the recycling industry have not always enjoyed the full impact of it, the American economy has been on a growth roll for the past decade. Even when the scrap metal or secondary fiber markets were down, business owners have been able to hope for silver linings on the horizon as long as the healthy economy chugged along, ensuring an end market for commodities, even when the price was down.

If there is a silver lining in higher petroleum prices, it might be that the situation demonstrates that commodities can increase in value. Much of the economic good fortune over the past decade has ridden on the back of low-priced commodities. In a smaller world, providers of raw materials have been played off one another by efficient and cost-conscious managers who have sought out the lowest price—whether it comes from down the street or across the ocean.

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SENNEBOGEN 340G telehandler improves the view in Macon County, NC

An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).

Sponsored Content

SENNEBOGEN 340G telehandler improves the view in Macon County, NC

An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).

Sponsored Content

SENNEBOGEN 340G telehandler improves the view in Macon County, NC

An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).

Sponsored Content

SENNEBOGEN 340G telehandler improves the view in Macon County, NC

An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).

Sponsored Content

SENNEBOGEN 340G telehandler improves the view in Macon County, NC

An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).

Sponsored Content

SENNEBOGEN 340G telehandler improves the view in Macon County, NC

An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).

Sponsored Content

SENNEBOGEN 340G telehandler improves the view in Macon County, NC

An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).

But the rise in petroleum prices (as well as paper stock prices, it should be noted) demonstrates that the situation is not permanent for commodities providers. Although many in the metals industry need to reach back to remember the better times, supply and demand curves do change, and despite rumblings about overcapacity, sellers still have a product that is needed by a buyer somewhere in the world.