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From: Fred Friedman (FRIEDMAN.FRED@EPAMAIL.EPA.GOV)
Date: Wed Oct 07 1998 - 03:51:00 EDT


Date: Wed, 7 Oct 98 08:51 WET DST
From: FRIEDMAN.FRED@EPAMAIL.EPA.GOV (Fred Friedman)
Subject: Re: Business of recycling (Julie Lowney)

Oct 7, 1998

Dear Julie Lowney,

Every question having to do with the business of recycling may be answered incorrectly, since commodity markets are volatile whether the commodities be recycled or virgin in their raw materials. An economic downturn globally such as we are experiencing, will be bad for commodities in general and will create downward spirals in pricing. You cannot break into recycling profitably now, unless you are willing to accept profit margins that are minimal when compared with what they once were. Recyclers who are experienced, are currently the only ones who can be trusted to expand in such an economic environment, since they know markets that will still take materials, domestically and internationally, and they are able to hedge the unprofitability of one substance that they collect with the marginal profitability of another.
For example, scrap metals, one of the most reliable hedges and cash cows for recyclers are glutting the market at the moment (for steel and aluminum, though not for eg copper) because of several factors including the strike at General Motors, and the currency collapses or balances of trade in Asia and Russia.

What areas of recycling are most viable, NOW? Probably niche markets: construction materials recycling, specific metals recycling, electronics e.g. circuit board recycling, subsidized battery recycling, etc.

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