Market shrinkage

The closure of two prominent mills in the Pacific Northwest in the past five months has placed cardboard recycling efforts in a shaky situation. Local recyclers find themselves more dependent than ever on the stability of foreign markets, and affordable alternatives are nearly non-existent.

Mason Mikkola, manager at Pacific Steel and Recycling, equates the closures of Smurfit-Stone Container Corp.'s Frenchtown mill late last month and International Paper Company's facility in Albany, Ore., in October to "taking 50 percent of the players out of the market." Only two major mills are left in the region—in Springfield, Ore., and Longview, Wash.

If foreign demand for recyclables from urban centers like Seattle dries up, those domestic mills will likely buy less from Montana recyclers.

"I'm just hoping that the two mills that are online here—if the export goes away—can handle the tonnage generated in the northwest," Mikkola says. "Otherwise, we'll have to look at other places like California."

Freight costs even within the region have already proved challenging in the current economy, says David Seeberger at Allied Waste Services. He doesn't envision ever using mills outside of the Pacific Northwest.

"Probably about nine to 12 months ago...transportation pretty much ate up everything and our profitability was definitely in doubt," Seeberger says. "If it had carried on for any length of time, we probably would have had to reevaluate our recycling."

Mark Nelson, solid waste manager for Lake County, says the loss of Smurfit-Stone doesn't pose any immediate local problems. Mills in Washington and Oregon have historically offered better rates—about $100 a ton—for cardboard, so most of Missoula's cardboard was already shipping west. The concerns are more long-term.

"It's a matter of capacity," Nelson says. "If the mill can only process, say, 1,000 tons a day and they have 2,000 tons available to them a day, somebody's not going to get to sell to them."

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