
Material recovery facilities (MRFs) are not traditional scrap business models and instead are cleaning systems for specific commodities, said Michel Timpane during the session “Managing the Risk of Recycling Markets” at WasteExpo 2016, held at the Las Vegas Convention Center June 6-9, 2016.
Timpane, affiliate vice president of Resource Recycling Systems (RRS), Ann Arbor, Michigan, said many people confuse the MRF model with the scrap business. “And the scrap business is very different than the MRF business,” Timpane said.
He added, “We’re not in the scrap business, we’re in the cleaning business.”
For one, MRFs process materials every day (or as many days as a specific facility’s schedule allows). Scrap yards, on the other hand, “can turn off supply,” when necessary, he said.
While scrap buyers base pricing on market price, single-stream recycling is “the most volatile market out there,” Timpane said.
He concluded that commodities are not a reliable payer for MRFs. “We should not be risking our heart and soul on commodities,” he said.
As each additional material recovered from MRFs increases the total cost of cleaning, Timpane said MRFs should take a “cafeteria approach” to handling commodities: When a community wants to recover a different type of material, the price would go up so much, he explained. And communities are interested: Timpane said “you can’t go anywhere” where people do not want more single-stream recycling in their area.
“Supply has grown exorbitantly at MRFs because high volatility, material is less than pristine and it is the last part of the scrap chain,” Timpane said, adding, “As quantity grows, price will continue to go down.”
Session moderator Chaz Miller, director of policy/advocacy for the National Waste & Recycling Association (NWRA), Washington, said less-than-pristine materials will not sell. Buyers of bales coming out of MRFs want a consistent product. When recyclables are competing with raw materials, an inconsistent product won’t make money.
He explained, “Recyclables are a raw material. If you don’t have a market or a buyer, what have you done? Recycling competes with other materials, raw materials, and you want the same input so you get the same output.”
WasteExpo 2016 was June 6-9, 2016, at the Las Vegas Convention Center.
He added, “We’re not in the scrap business, we’re in the cleaning business.”
For one, MRFs process materials every day (or as many days as a specific facility’s schedule allows). Scrap yards, on the other hand, “can turn off supply,” when necessary, he said.
While scrap buyers base pricing on market price, single-stream recycling is “the most volatile market out there,” Timpane said.
He concluded that commodities are not a reliable payer for MRFs. “We should not be risking our heart and soul on commodities,” he said.
As each additional material recovered from MRFs increases the total cost of cleaning, Timpane said MRFs should take a “cafeteria approach” to handling commodities: When a community wants to recover a different type of material, the price would go up so much, he explained. And communities are interested: Timpane said “you can’t go anywhere” where people do not want more single-stream recycling in their area.
“Supply has grown exorbitantly at MRFs because high volatility, material is less than pristine and it is the last part of the scrap chain,” Timpane said, adding, “As quantity grows, price will continue to go down.”
Session moderator Chaz Miller, director of policy/advocacy for the National Waste & Recycling Association (NWRA), Washington, said less-than-pristine materials will not sell. Buyers of bales coming out of MRFs want a consistent product. When recyclables are competing with raw materials, an inconsistent product won’t make money.
He explained, “Recyclables are a raw material. If you don’t have a market or a buyer, what have you done? Recycling competes with other materials, raw materials, and you want the same input so you get the same output.”
WasteExpo 2016 was June 6-9, 2016, at the Las Vegas Convention Center.
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