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Financial crisis slashes scrap prices by half
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Posted on Oct 14 2008
Due to the current worldwide financial crisis, a local recycling company reduced in half the price of scrap materials it pays to customers.
Basula Produkto, recycler of cardboard, white paper, aluminum glass and plastics, said the value of scrap materials for recycling has gone down.
Beginning tomorrow, Oct. 16, the buying prices would be slashed from 7 cents per kilo to 3.50 cents a kilo or even zero.
The company, which is a joint venture between Erricco and Maeda, said this would only be temporary until the market stabilizes.
Basula Produkto president Eric Cruz said he hopes this will not discourage sellers.
“We trust for your understanding. We will continue to receive scrap materials with a reduced rate but this is just for the meantime. We don’t know how long the financial problem would last,” Cruz said as he showed compacted metals in container vans that are ready for export to Asian countries.
The company sells about 85 percent of the scrap materials to mainland China.
Cruz explained that recycling is a critical business in a small island like Saipan because if his company stops operating, then there would be mountains and mountains of scrap materials not only in their compound but around the CNMI.
The company can compress around 30,000 tons of scrap materials using metal and aluminum compactors. The scrap materials could then be stored into container vans for export.
“We’re selling our end products 100 percent to Asian markets,” Cruz said.
The company had been operating the past 30 years.
“What we are experiencing when we were just starting this business, we are experiencing it now,” Cruz said.
He said during that time scrap metals were not saleable items and there was no available market.
Cruz said he believes that the current financial crisis started since the Beijing Olympics.
