Agenda - Council - 10/14/1980 - Laserfiche WebLink

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- 21 - III. FINANCING AND PROGRAM COSTS This section of the preliminary report includes a description and evalu- ation of financing from market revenues and program costs since these two factors will be keys to the success of any abatement strategy. Also, in discussions on the various systems, even in a general manner, it is important to keep the economics of each proposal in perspective. A. CURRENT ~RKET CONDITIONS 1. MATERIALS MARKETS The condition of the secondary materials markets'varies depending on the specific material, its demand and other related factors, such as current stability of the overall economyz Newsprint and ferrous markets have been subject to substantial fluctuations, while aluminum, copper, brass, glass, office paper and corrugated markets, especially in this Region, are relatively stable. There are some indications that at least some of the materials markets have begun to stabilize. There are, however, some contrary indications that the current recession is causing a slight decline in even the supposedly stable market prices, such as that for aluminum. Energy economics and demand for virgin materials have profound influences on secondary materials markets. Secondary materials processing enjoys the advantage of significantly higher efficiencies over.processing of virgin materials. Geographic location of markets also plays a key role in materials recovery economics because of transportation costs. The following describes current materials market conditions in the Twin Cities Area. a. Waste Paper The newsprint market has had a record of extreme price fluctuations. Many recycling programs died out after ~e market peak and subsequent drop in 1974 because of the economic recession. Since then, many new paper recovery efforts have been established and have been operating somewhat more consistently. The cellulose insulation industry has been ~ very active after a slump two years ago stemming from bad publicity concerning fire hazards, although the present building slowdown is having some effect. Also, the U.S. Department of Agriculture projects that national wood fiber demand will exceed timber production within the next five years. Regional demand for waste paper from a new newsprint mill in Ontario may also be favorably influencing the Twin Cities market. So, even though the current newsprint market in this Region is unstable, with only moderate demand, there are indications of improvement, especially if a new newsprint mill were to locate in this area.