Many operators of auto shredding plants have their backgrounds in the iron and steel scrap sector. Nonetheless, most have invested heavily in the past two decades to harvest and then upgrade the nonferrous scrap fractions of their shredder output.
By volume, aluminum-rich
The Washington-based Institute of Scrap Recycling Industries (ISRI) specification for
The grade generally is not smelter-ready, meaning its destinations are most often either highly automated and technologically advanced specialty processing facilities in North America or overseas destinations where the sorting is (most often) undertaken by hand by laborers. In other cases, smelter operators can choose to add front-end systems to upgrade the material themselves.
At any given time, several factors combine to determine which type of destination will be more cost-effective. Before the end of this decade, a new factor could cause a dramatic change in the market.
The classification game
As with any other scrap grade,
Randy Goodman, a nonferrous metals trader with Greenland (America) Inc., based in the Atlanta area, says that beyond its metallic content percentages,
If one divides
All buyers in China, Goodman says, like the large fraction because it is the easiest to sort. However, he comments, “The smelters became the sole buyers of the large
The next-size-down “small” fraction also has its buyers, he says, because “it can still be hand sorted but has two to three times the amount of [high-value] red metals in the mix.” Many of these buyers operate yards in the Guangdong Province of south China.
As the labor shortage has become
The fines fraction does not yield these opportunities for hand sorters and thus has moved into different channels. In China, Goodman says, “The fines are exclusively the domain of the water table [density separation] yards.” He continues, however, “With Green Fence and National Sword, there has been a significant crackdown on water table yards without proper permitting (which is almost all of them). Many have been put out of business, but others are still operating.”
Goodman’s comment points to a trend that could be poised to bring widespread disruption to the
A sorting technology provider, who also wishes to remain anonymous, says Shanghai-based Sigma Metals, one of China’s largest secondary aluminum producers, has shifted much of its sourcing to domestic Chinese scrap.
An April 18, 2017, pronouncement from China’s central government, and the swirl of rumors that has followed it, likely has China’s other major
*Average monthly settlement price, cash buyer for aluminum alloy, U.S. dollars per metric ton; Source: London Metal Exchange, www.lme.com.
China’s central government has reviewed and approved a prohibition on imports of several types of yet unidentified scrap materials, according to the Brussels-based Bureau of International Recycling (BIR).
In an alert summarizing the announcement that was sent to its members, the BIR says the ban is being positioned as part of China’s “reformed solid waste import management plan.”
At ISRI2017 in late April in New Orleans, metal recyclers expressed concerns about which grades of scrap might be on the list.
Follow-up conversations between Recycling Today and traders and processors based in south China have identified mixed and shredded motors and unprocessed wire and cable as grades that could be affected soon—possibly by 2018.
In the first half of 2017, the National Sword initiative being undertaken as a cooperative effort by several Chinese government agencies has focused on plastic scrap, quickly and dramatically pinching the flow of containerized shipments into China.
By early April 2017, the China Scrap Plastics Association was reporting that some 5,000 containers of plastic scrap were stuck in the port of Hong Kong, unable to gain clearance (or affordable clearance without an exorbitant Customs fee) into the People’s Republic of China.
Metals recyclers say they are greatly concerned an equally grim scenario could someday confront them.
As of mid-May 2017,
Discussions at ISRI2017 in April and at the BIR World Recycling Convention in May are likely to lead to delegations representing these groups (and government and industry allies they can recruit) to convince China that a sweeping ban is
Goodman is not convinced China intends to enforce a ban that will include mixed metals imports. “My thought is that China is doing what it thinks is needed to bring its environmental issues to the forefront,” he comments. “But China will not, in my opinion, cut off its nose to spite itself. They need the aluminum units. It is a vital part of their manufacturing sector. It is my opinion that you might see other items in the ‘class 7’ category [such as shredded motors] banned.”
Along with pricing changes to aluminum, copper and stainless steel, uncertainty in the largest export market likely will affect the way shredder operators calibrate their downstream nonferrous sorting systems throughout 2017 and beyond.
“My thought is that China is doing what it thinks is needed to bring its environmental issues to the forefront. But China will not, in my opinion, cut off its nose to spite itself. They need the aluminum units. It is a vital part of their manufacturing sector. It is my opinion that you might see other items in the ‘class 7’ category [such as shredded motors] banned.” – Randy Goodman, Greenland (America) Inc.
Techniques for the times
Aluminum pricing has been relatively stable this decade, though pricing and demand factors can affect where advanced sorting will take place to make the purest aluminum product possible.
Likewise, price movements in copper and nickel can affect how intensively shredding plant operators seek to isolate the maximum amount of copper or create a nickel and stainless
Goodman says if a shredder yard has invested in induction sorting equipment to produce a
He lists several reasons for his position. “Operators who turn them off often don’t ever run them well again,” Goodman says. Some
Goodman concedes one counterpoint: “The caveat is that there are a lot of older sensors out there that demand more maintenance than makes it worthwhile, and those yards might make the decision based on maintenance costs.”
Zorba that is not exported from the U.S. most often makes its way to specialty
Additionally, secondary aluminum alloy producers, such as Kentucky-based Audubon Metals LLC and Minnesota-based Spectro Alloys Corp., run their own separation processes upstream from their melt shops.
Regarding this segment of domestic
In a sector where “scrap is bought, not sold,” shredder operators may consider the ongoing chase for auto bodies and inbound material as likely to remain the most time-consuming challenge when it comes to navigating the
However, if China’s large-volume buying is scaled back, even the combination of domestic demand and emerging export destinations (See the sidebar, “Sorting Winners from Losers,” on page 57.) is unlikely to ease the disruption if a sudden import barrier is put in place by China.
For recyclers preferring a disruption-free 2017 and 2018,