Commodity prices put the squeeze on Canberra recycler

Business at Canberra's recycling centre has returned to full pace after it was closed in January due to safety breaches, although its operator says reduced markets and falling prices are making the business "very challenging".

The stockpiles of plastic which last month blocked the doors of the Re.Group facility and caused WorkSafe ACT to investigate may have gone, but the pressure of making even a modest profit out of recycling material from Canberra and its local region remains.

The current state of Re.Group's recycling facility off Mugga Lane. Photo: Elesa Kurtz

The current state of Re.Group's recycling facility off Mugga Lane. Photo: Elesa Kurtz

"There's no hiding from it; it's been a very tough market since China stopped taking recycled products from the beginning of last year," Re.Group chief development officer Garth Lamb said.

Before the ban was imposed, China took an estimated 619,000 tonnes of recycled material from Australia. Now that material must either be picked up by an alternative international customer, or be pushed back through the domestic market.

The Hume facility processes around 60,000 tonnes of material a year, with regular visitors to the centre including trucks from as far as the Snowy Monaro Regional Council and the Yass Valley Council.

"Ninety-five per cent of what comes into the Canberra facility gets sold into the Australian market, but when the world's biggest buyer of recycled content shuts its doors, that has had a huge knock-on effect," Mr Lamb said.

"Like any market when you suddenly have a lot more supply than demand, there's a commercial impact and prices are affected.

"Even if you are selling to an Australian buyer, you are selling to global commodity benchmarks. That's why every recycler has had a challenging time over the past 18 months."

He wouldn't disclose how profitable the Hume recycling centre was, but instead said optimistically: "we're still here".

Re.Group has the contract for Canberra's recycling through to 2022 and invested around $8 million into new equipment in late 2017.

"The issue is with some of the lower grade and mixed plastics, which have traditionally been exported," he said.

"That's been the hard material to move and that's the stuff we had a bit too much [of] on site earlier this year. I can't pretend that it's been easy to move on."

Stockpiling quantities on site, Mr Lamb said, was necessary for efficient transport economics.

"You need to have a full truckload of each specific type of material to make it efficient to truck out. You need a full truck's worth of each specific material so that it goes direct to the one location."

He said Canberrans were "pretty good" at recycling by national standards, but contamination was a "constant battle" with about 10 per cent of the content of household yellow bins not being recyclable content.