Lisa McKenna

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Redeeming qualities

Commodity Focus

Markets for the zurik grade of mixed metals exist, but its specifications often are unclear.

June 2, 2015

Brokers and traders dealing with the zurik grade of mixed metals express that the uncertainty surrounding the content and composition of the grade makes it a challenging commodity.

Even though this mixture is defined by its own Institute of Scrap Industries (ISRI), Washington, specification (published in its “Scrap Specifications Circular 2015” and in prior years), the spec allows for some variability.

Defined by ISRI’s circular, zurik is a combination of shredded nonferrous metals predominantly comprising stainless steel, plus insulated copper wire (ICW), aluminum, copper, lead, magnesium and other metals, accumulated from auto and appliance shredders and generated by downstream computer sensing equipment. The grade has a metals content that is agreed to by the buyer and seller.

But even with this lengthy definition, confusion and caution remain two of the watchwords that characterize this mixture and its relevant markets.
 

Gaining perspective

Zurik often is compared with its more consistent sibling, zorba, the shredded nonferrous grade, predominantly comprising aluminum, that is typically generated from the positive stream of eddy current separation. Meanwhile, the negative eddy current flow typically serves as the precursor to zurik, created via sensor sorting in most processing facilities. Considering the aluminum content of what’s shredded, zorba is a far more voluminous commodity. Industry estimates are that for every several loads of zorba produced, there’s just one load of zurik.

Randy Goodman, executive vice president of Greenland America Inc., Roswell, Georgia, and chairman of ISRI’s Scrap Specifications Committee when the zurik spec was written, surmises zurik is finding buyers in Asia now, with zorba markets slowing presently based on lackluster aluminum demand.

“There was a whole infrastructure in China (and some in India) for sorting zorba previously, but with a stronger aluminum market in the U.S. and [a] weaker [market] in China, zorba is not as much in favor now,” he says.

Meanwhile, zurik can fill that void, Goodman says.

Some domestic processors may opt to cherry-pick larger stainless pieces from zurik, depending on its price, he says. However the remaining zurik often will be exported for further sorting.

John Hunsaker, partner and president of ZStainless LLC and owner of Innovative Metals, with offices in Summerville, South Carolina, points out what he believes to be a key aspect of zurik: “The percentage of each metal within the nonferrous concentrate shall be subject to agreement between buyer and seller.”

ZStainless (the Z stands for zurik) is a joint venture company that processes zurik in India.

Hunsaker, who has been in the secondary raw materials business for 47 years, describes zurik as a challenging material to assess via simple inspection.

“Zurik is the most heterogeneous material I have dealt with, and [the] no-value percentage is the biggest problem,” he says, referring to its nonmetallic content. “Percentages of payable components and no-value (rubber, plastic, foam, dirt, etc.) [components] vary container by container from the same suppliers, especially [those] with multiple locations.

Hunsaker says the likelihood of varying percentages from different suppliers increases based on a number of factors:

  • the type of downstream technology employed;
  • sensor settings;
  • feedstock and feed rate; and
  • region (Proportions and types of end-of-life autos and appliances from one city might differ from those of another, while metals content may vary if parts were pulled from vehicles before shredding. Additionally, newer vehicles may contribute more electronic components that end up in zurik.).
     

“Inspecting piles of zurik even with a trained eye is very difficult, and frequently represented percentages of suppliers are quite different than sortation reports,” he observes. “Because of these issues, we don’t buy on a prepaid basis and [we buy] only with agreed terms.”

Hunsaker says the typical components of zurik include nonmagnetic stainless steel, ICW, white metals, lacquered copper, brasses, circuit boards “and the dreaded nonmetallic no-value material.”
 

Taking things further

Recyclers have their own perspectives and approaches to today’s zurik markets.

Putting a price on zurik

Adding to zurik’s level of variability is the absence of published pricing for this inconsistent grade.

According to one trader interviewed for this story, in late April 2015, zurik for export was valued at a range of 40 cents to 45 cents per pound, depending on its copper levels. But even he couldn’t be sure of wider market values.

Meanwhile, a review of price reporting services, such as the service from American Metals Market, indicates that zurik is not one of the various metals grades currently tracked in terms of value.

Bristol Voss, editor-in-chief for AMM, says while AMM never made an institutional choice to exclude this grade from its published pricing lists, zurik is difficult to value because of its varied composition.

“Something that has nearly exact portions of known commodities is where our emphasis is,” she says, adding while that doesn’t mean AMM won’t price zurik in the future, it has no plans to do so now.

She also points to the prepayment phenomenon that sometimes exists for exported zurik, in which buyers prepay for a mix that isn’t thoroughly understood in terms of its components.

Finally, Voss contrasted zurik to zorba, another mixed grade that AMM hasn’t priced but that from most sources “can be counted on to be at least 92 percent metallic.”

Even so, she says, the precise combination of metals in zorba is not standardized, “and thus we do not at this time, price, assess or follow zorba either.”

Scott Joseph, managing director of Reserve Marine, Chicago, says he has been selling zurik into South China; but, he adds, “It’s a very weak market.”

While Joseph says he believes zurik remains an export product, the low price for stainless steel in China lately, as in the U.S., serves as a further aggravation for a product that has a majority of its value tied to stainless steel and as much as 20 percent that is at risk of being considered waste.

“Almost nobody makes good zurik,” Joseph says.

Further, he observes, “three months ago we were exporting it, no problem. Now the Green Fence is starting up again, and the doors are starting to close.”

However, not all U.S.-based recyclers say they are turning to export markets to sell the zurik produced domestically. Grant Milliron, president of Milliron Iron & Metal in Mansfield, Ohio, says while the company does produce zurik, it does not sell it in that form.

“We clean the material, and when I market that finished product,” he says, “it’s no longer zurik—it’s a 304 stainless grade.”

Milliron, who says he exported zurik in years past, made the decision a few years ago to upgrade his recovery system to extract stainless steel to obtain a 304 clip that is sold domestically, he says.

“It’s that clean,” he says of the resulting product. “We have the ability to end up with a finished product that is ready to be burned.”

This stainless steel shred, as Milliron calls it, consists mostly of 304 stainless but also could contain some 316 and 309, too. To accomplish this, he says his process uses widely available technology, arranged in a specific fashion.

“We’ve got equipment to remove ICW,” he says. He says the processes, which may include some hand-sorting, result in 15 to 20 percent of the zurik going for disposal.

“When we’re finished with the product, we no longer have zurik,” he says. “To do that we have extracted all other metals that were commingled with the zurik.”
 

Many questions

On the buying side of the equation, stainless steel processors such as ELG, with global headquarters in Duisburg, Germany, and a network of U.S. offices, also seem to be wary of the zurik grade. ELG serves as one of the wholesalers to the stainless steel industry.

Alasdair Gledhill, a product manager with ELG who is based in Pittsburgh, describes zurik as a confusing material to deal with and one that he by and large avoids.

He explains that, depending on the stream from which zurik is generated, a load of the mix could contain different contaminants, such as copper, aluminum, tin and lead, which are residual elements strictly controlled by stainless mills producing the 304 grade in terms of the allowable percentages of each within the melt.

“As a buyer you have to understand the process the recycler is using to get the product that is being represented for sale,” Gledhill explains.

Furthermore, Gledhill observes, because stainless shred comes predominantly from the shredding of autos and appliances, “you are going to get different types of metal in there,” he says. “It just depends on how good the downstream [system] is at sorting and segregating different metals, alloys, nonmetallics and contaminants.”

For these reasons, Gledhill says, he doesn’t purchase zurik and, in fact, he never has. However, he says that if he were considering buying the grade, he would be sure to ask plenty of questions about how the shred was processed.

“I do use zurik-type products,” he explains, “but I never once bought ‘zurik.’ I’ve always bought a 304 shredded product, and I have agreed about the constituent metals in the package.”

Even when considering a 304 shred, Gledhill says, he still exercises caution. “When I buy shred, I buy it with my eyes wide open,” he says. Ensuing discussions center around what other metals might also be in the mix and the cleanliness of the shred. “I always wait for the laboratory analysis to fix the final price,” he notes.

Gledhill says one option for zurik, however, could be including it within a blend so as to dilute potential contaminants. However, he also refers to the mill specification calling for no more than 0.5 percent copper (among other potential contaminants) in a batch of stainless steel scrap to be used in a melt for the 304 grade.

“Regular stainless steel scrap is generally already pushing right up against the 0.5 percent,” he cautions.
 

Future opportunities

Goodman agrees that today’s domestic zurik market follows stainless prices, meaning at times it is only suitable to pick out the largest pieces of stainless. Even then there are risks, he says, such as a piece of lead occasionally mistaken for stainless steel.

The biggest challenge, he says: Zurik isn’t a clean grade.

“It’s always going to have other contaminants in it, and the challenge is how much contaminants the buying companies can accept,” Goodman says.

If there were ever opportunities with regard to zurik, he adds, many of them are in the past.

“The opportunity was the metal that was in the ASR,” he says. “We’ve gotten the material out.”

As for future opportunities, though, Goodman says still believes zurik may have its redeeming qualities.

“I think that it’s always going to be a fraction that has challenges to it, but it’s worth the challenge, A, to keep the metal out of landfills and, B, to add to the revenue stream.”


 

The author is a managing editor with the Recycling Today Media Group and can be reached at lmckenna@gie.net.

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