Central Kentucky Fiber Resources, LLC   847 Angliana Ave  Lexington,KY40508   (859) 225-8100

How Do Oil Prices Affect Recycling?

How Do Oil Prices Affect Recycling?

When oil prices go down and gas prices follow suit, it's often met with a celebration by motorists when they go to fill up at the pump. After all, who doesn't like saving money at the gas pump? But while lower oil prices can put a smile on the face of drivers across the country, there are other industries that aren't so happy to see oil prices take a dip, even if it's just a temporary one. One of these industries is recycling. 

Yes, contrary to what you might have thought, low oil prices don't do the recycling industry any favors. In fact, to a certain extent, they can do a fair share of harm to it.

The Impact on Plastic Recycling

Plastics are essentially products of petroleum. So when oil goes down in price, so does plastic resin. And if oil prices dip too much, it can be cheaper for plastic manufacturers to buy new plastic resin than for them to buy recycled feedstock. While many manufacturers recognize the importance of recycling and doing what they can to limit their environmental footprint, manufacturing is a bottom line industry. If it's cheaper to buy virgin resin than it is to buy recycled feedstock, they're going to opt for the cheaper option in many cases.

If oil prices dip too much, it can be cheaper for plastic manufacturers to buy new plastic resin than for them to buy recycled feedstock.

The Impact on Paper/Metals Recycling

Plastics recycling isn't the only aspect of recycling that is affected by low oil prices. Metal and paper recycling also are impacted. That's largely because low oil prices help the U.S. economy overall. Specifically, low oil prices help to strengthen the dollar. When currency is strengthened, paper and metal scrap from the U.S. becomes more expensive than it is elsewhere, which will lead to a reduction in these recyclables. 

Contact Us Today

Now just because oil prices might have a negative effect on recycling doesn't mean that recycling isn't still viable. It also doesn't mean that manufacturers don't realize the benefits of going the recycled route over the virgin materials route. It essentially just makes recycled materials, to a certain extent, more difficult to justify. 

But recycling unquestionably has its benefits and has a place regardless of the price of oil, and it's just up to us to recognize that and make the decisions that are the best for the environment. For instance, recycling can help in other ways, such as in using less energy to create new parts than it would if the materials were virgin. 

Yes, oil prices can have a negative impact on recycling overall, but that shouldn't discourage us from continuing to make the right choices. For more information on the importance of recycling, and to set up a business consultation to learn how you can start an industrial recycling program at your business, contact us today.

Want to see more? Follow us on Twitter!