The fire at the Coolaroo recycling plant. Credit:Courtesy of Seven News Since February, when a fire damaged the recycling plant, SKM has been forced to stockpile about 250 tonnes of recyclable waste a day, mostly at its sites in Laverton and Hallam. That's about 25 garbage truck loads each day. Some was kept at Coolaroo but that was consumed when that plant again went up in flames on July 13. This most-recent fire covered an area about the size of a football field, blanketed much of the city in ash, and took 11 days for firefighters to bring under control.

It took 11 days for fire fighters to bring the football field-sized fire under control. Credit:Courtesy of Seven News Experts put the damage to the plant at about $32 million. A class action by affected residents, many of whom were evacuated from their homes, is understood to be targeting damages of more than $10 million. This aerial image, shot in February, shows recycling piling up at SKM's Coolaroo site. Credit:Nearmap.com.au Industry experts say increased stockpiling of flammable recycling material caused by low commodity prices may be fuelling the fire risk, although SKM says this was not a factor in the July blaze.

"The stockpiling ... is not standard practice for SKM," a company spokesman said. "It was a result of an electrical fire in processing equipment last February which impacted SKM's ability to keep pace with processing the arriving recyclable material." The SKM Coolaroo site has caught fire at least nine times in the past five years, including at least four times this year. Russell Boucher, a waste-management-industry insurance broker at insurance broker Arthur J. Gallagher, said the spate of fires at recycling plants across Australia in the past few years has driven a spike in insurance premiums. Some operators have even become uninsurable, he said.

Increased stockpiling of flammable recycling caused by falling commodity prices, including paper and plastics, on sites was also a major fire risk factor that insurers were becoming concerned about, Mr Boucher said. "Not all the operators are complying with the stringent risk management process they should be. And these are the ones we find are burning down." The recycling industry is concerned about increasing stockpiling on sites caused by, among other factors, a global downturn in commodity prices. Exacerbating the problem, Victorians continue to get better and better at recycling.

Recyclers operate on very narrow margins. A huge fall in commodity prices in the past three years, coupled with China flooding the market with extremely cheap plastic, has made the industry uneconomic, leading members say. "We've got plenty of supply, and no demand," says Peter Anderson, CEO of the Victorian Waste Management Association. "We're getting better at recycling, which is great until the system breaks down, which is what has happened here. It has broken down because we haven't thought through the whole process. "We have a recycling policy, but we don't have a recycling industry. We have a dead end, in other words." A survey of the industry shows plastic recycling actually fell 3 per cent in 2015-16.

Less than a third of plastic consumed in Australia is recycled, the figures show. Grant Musgrove, chief executive of the Australian Council of Recycling, said China was now making new plastic at a much cheaper price than recyclers could offer. "There is an oversupply of materials in the world globally, principally driven by China. China has massive excess capacity in material streams and massive stockpiles of their own," Mr Musgrove said. "Just take plastics: prices have gone from $200 a tonne down to between $10 and $20 a tonne. Paper is similar, it's also collapsed." Loading

The Chinese manufacturers were, Mr Musgrove said, "state-owned enterprises that aren't responsive to market forces". "They just keep doing what they're doing."