West Michigan manufacturers could be sitting on a widely available yet untapped revenue stream: old corrugated cardboard.
Fluctuations in the international market have nearly doubled the price for the ubiquitous material in recent months. While many manufacturers already recycle their corrugated waste, sustainability advocates believe the sharp increase in prices could sweeten the value proposition for companies that still send it to the landfill.
Overall, recycling the corrugated cardboard currently headed to landfills could represent a $115 million opportunity if residential cardboard waste is also taken into account, according to results of a study by the West Michigan Sustainable Business Forum updated with current pricing data.
“If they’re recycling, and every manufacturer should be, depending on how their rebates are structured, they could be expecting more scrap value,” said WMSBF Director Dan Schoonmaker. “If they’re not currently capturing it and they have enough where they can get scrap value for it, now is the best time to do it in 20 years. … (Recycling corrugated) hadn’t been deemed as much of an imperative, but now that the market is hot, the economic incentive has caught up with the moral one.”
Prices for old corrugated cardboard (OCC) have hovered near $170 per ton in recent months, roughly double the price it demanded a year ago, according to data provided by the Kent County Department of Public Works.
Aggressive demand from the Chinese market starting in November 2016 drove up OCC prices, according to a report in Recycling Today, an industry trade publication. The report notes Chinese demand for OCC may temper somewhat, although the commodity is still trading just below its peak price of $175 per ton in March.
For Schoonmaker, corrugated cardboard represents one of the easiest materials for businesses to recycle, both from an economical and operational standpoint.
“There’s a substantial number of companies that aren’t doing as good of a job as they could be recycling one of the easiest materials to recycle,” he said. “We flagged that in our landfill study last year as the definition of low-hanging fruit for improving recycling in Michigan. It’s the easiest thing to recycle and at the time a reasonably valuable material. The market is consistent, it doesn’t fluctuate. The majority of it — even in this age of Amazon Prime — is still coming out of the commercial sector.”
The West Michigan Sustainable Business Forum conducted a study last year showing that residents and businesses in the region sent roughly $399 million in recyclable material to the landfill. Of that, approximately $57.5 million was in the form of corrugated cardboard.
“If we’re talking about recycling for the sake of recycling for a community benefit, that value has increased dramatically over the last year,” Schoonmaker said. “Before we were talking about how it was a great big deal that we were losing so much material to the landfill when it was only about $57 million worth of material. Now it’s twice that.”
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