Archive for Thursday, June 22, 2000

Local recycling plant closes its doors

June 22, 2000

Due to staggering metal prices and increasing fuel costs, Lonnie's Recycling has closed down its Eudora operation.

The center, which recycled scrap metal and aluminum cans, first opened in November 1999 at 215 E. 10th Street. As fuel costs began to rise at the first of the year, Faler considered closing down the Eudora location due to increasing operating costs. He reconsidered, but said the cost became too great to keep it open. The center closed its doors May 27.

"I was really trying to keep that place in Eudora going, but the best day I had in Eudora I was in the hole $41," Faler said. "But if I'm sitting down there with a building, advertising, employees and the prices are going down, it's just too much."

The primary catalyst for the center's closing was the decreasing cost of scrap metal. Faler hauls collected metals to River City Recycling in Kansas City, Mo., which is then purchased by a scrap buyer and sold to steel mills. Ron Gonnerman, ferrous scrap buyer for River City Recycling said the price for scrap metals has dropped significantly since January. In May, the price dropped $9 per ton and he estimated the drop was between $15-20 per ton since January.

"Since the first of the year it's been a steady downward spiral," Gonnerman said. "There is a lot of scrap available for the steel mills to purchase from. If you've got too much of a product, it's hard to move."

Gonnerman said it would take a few months before the price is expected to increase.

"I think it will take two or three months before we see it moving the other way," Gonnerman said. Increasing fuel costs have also hurt the recycling industry. After paying hired help and prices at the pump, Faler said keeping his Eudora operation going was a losing battle.

"I might have to get a horse and buggy, I don't know," he said.

Gonnerman said fuel prices doesn't affect the KC scrap buyer as much as it does Faler and others like him who must take their goods elsewhere.

"Our transportation is not affected as much as their transportation," Gonnerman said. "When our product is ready for the steel mill, 95 percent of it is shipped by rail."

Faler said he has roll-off boxes in Baldwin City and Lawrence, where recyclers bring their scrap metal and drop it off without be paid. He said this would be a reasonable solution from Eudora, but its placement would be contingent on the city. The request, he said, would have to come through its residents.

"It's just my time and fuel to go down there to drop a box," Faler said. "I'd donate the box at no charge and pick up the metal for it if they designate a place for it.

"I'm going to hold off unless the public says 'yeah, we need something like that.'"

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