downcycle

Economics. a period or cycle during which business activity or profitability is at a low point: Energy companies are facing increased cost pressure to get through the current market downcycle.

to process (used goods or waste material) in order to produce something of lesser quality because the original material cannot be recycled into something of the same or better quality: The plastic bottles can't be reused, but some companies downcycle them into bags.: Compare upcycle (def. 1).