In a partial victory for recyclers, the Department of Conservation today announced that they would be adjusting payments to recyclers for most plastic beverage containers to reflect lower scrap prices.
Effective April 1, the processing payment for PET will increase from the current $170.41/ton to $216.32/ton and the processing payment for HDPE will increase from the current $186.29/ton to $220.90/ton.
The adjustment reflects a drop in scrap price of 14% for PET and 10% for HDPE when averaged over 12 months (Jan 08 to Dec 08). However, the real drop in scrap price was substantially more severe than that: from June to November of 2008, PET scrap prices dropped 80 percent from $397/ton to $85/ton.
The drop in scrap value will have cost recyclers more than $12 million for the first quarter of 2009 alone.
CAW, local governments and recyclers had been urging the Department to base the April 1 adjustment on the most recent quarter’s scrap value data. The Department announced that they will stick with the 12 month average for making adjustments and setting 2010 processing fees and payments. Therefore, recyclers can expect an additional increase on July 1, and potentially again on October 1.