The problem is that the supply curve is inflexible. This is a unique problem in economics, because usually the supply will respond very quickly to price, so when the price drops, less is produced, and prices can stabilize.
In this case, the supply is fixed by the regulations that require recycling. So when more product is dumped on the market than the market can handle, the price drops. However, the price signal to decrease production is defeated. Low price does not effect supply, because people are required to recycle, regardless of the price. The material is produced at what amounts to a fixed rate. So the price gets driven down to zero, or pretty close to zero.
There is a fiction that there is a functioning market for recycled materials, but as long as the supply rate is fixed, a functioning market is impossible.
Yes, and someone needed you academic explanation.
As I said in simple terms - our turning in goods for recycling has become greater than the need of those that can convert those goods into new goods, and so they are not willing to pay as much for all we want them to take. Our contractors are taking the hit, and they will either recover their costs from us or give us the choice of dumping more stuff in landfills.