Markets for many scrap metals were characterized by volatility in 2012. Many analysts have forecasted a similarly volatile 2013, particularly for ferrous scrap.
According to Standard & Poor’s Rating Services Associate Director of Natural Resources Megan Johnston (the author of “Softening Steel,” p. S8), the ferrous scrap market will experience volatility in the year ahead, largely because of erratic swings in steel demand and low iron ore prices. These factors are further influenced by China’s slowing economic growth and the recession in the euro zone.
However, the announcement from the Chinese central government regarding plans to increase electric arc furnace steelmaking capacity in that country was viewed as good news by scrap dealers throughout the world who could help to supply the ferrous scrap needed to feed these furnaces.
China, the largest consumer of copper scrap, has been less active in its purchasing as 2012 comes to a close. The country’s economy, while still robust by Western standards, has been slowing, as has its consumption of the red metal. Despite this, copper scrap dealers based in the U.S. are still optimistic heading into 2013.
Stainless steel and nickel scrap also were not strangers to volatility in 2012. With an oversupply of production capacity, the jumpy nature of the nickel pricing, the shifting of supply logistics and stagnant economies throughout the world, a number of scenarios are possible for stainless steel and nickel in the year ahead. However, many sources contacted for the article “A Moving Target,” p. S30, say they believe the market may be stronger in 2013 than it was in 2012.
For many traders and business executives, however, optimism does not seem to be the default emotion in the face of uncertainly. The fortunes of many of these metals and the industries that consume them likely will be influenced by how the U.S. legislature navigates the “fiscal cliff” that looms menacingly in the distance as I write this. With the uncertainty regarding future U.S. fiscal policy, many businesses have sidelined themselves until they have a clearer sense of the game and the rules that will govern it. Therefore, many have adopted a wait-and-see attitude that has interjected weariness into many markets as 2012 comes to a close, as it did during the U.S. presidential election in the fall of the year.
However, as many scrap dealers know, change is inevitable in secondary commodity markets. And, as the old saying goes, “The more things change, the more they stay the same.” The overriding goal remains the same for scrap dealers, regardless of the metals they handle, each year: Protect your margins to the fullest extent possible.
When Ed Mamou, vice president of Royal Oak Recycling, a Royal Oak, Mich.-based recycling firm, is asked what his company’s motto is, he is quick to say, “underpromise and overperform.”
This philosophy has been the cornerstone of Royal Oak Recycling’s business throughout its 20-year history.
Royal Oak Recycling, under the ownership of Ed’s father, Habib, reflects its founder’s hard work and philosophy of developing partnerships with customers. As a result, the company has grown from a small paper stock plant into a diversified, multistate operation.
From the Ground Floor to the Top Floor
The story of Habib’s entrance into the recycling industry is familiar and yet unique. Habib immigrated to the United States from Iraq in 1973 after leaving the Catholic priesthood, where he served for eight years. Uncertain about what to do in the United States, he started taking classes at a local university.
While attending college, he worked sweeping floors at Great Lakes Recycling, a Roseville, Mich., recycling firm. He was named a vice president of the company in 1983, propelled by his ambition and determination.
Sandy Rosen of Great Lakes Recycling fondly remembers working with Habib. “At the time he left, I tried to keep him,” Rosen says. “I told him we could do great things together. However, he is such a shrewd, hard-working guy, I knew he had to go on his own. He just has that drive to create his own empire.”
Habib ultimately purchased a small paper stock plant named Royal Oak Waste Paper & Metal in 1992. While the company was established in 1935, it was bumping along, “handling a little bit of office paper, cardboard and some metal,” Habib says.
Habib, who has worked in the recycling industry for 39 years, saw great opportunities ahead for his new company. He says pursuing the American Dream means always being on the lookout for ways to grow his business.
Not content with the small 10,000-square-foot warehouse and its modest processing capability, Habib, with the assistance of a Small Business Administration loan of $900,000, purchased a high-volume shredder and baler combination from Enterprise Co., Santa Ana, Calif.
Soon after, Royal Oak Recycling acquired land surrounding its original location with further expansion in mind. In 1998 the company applied for a $4.4 million low-interest Industrial Revenue Bond loan, which allowed it to add a second baler, increase its warehouse space, pave the surrounding property and add a railroad spur.
In 2005, with the company starting to take off, Habib realized he needed more help. That’s when he called on his son Ed, who came aboard as a vice president.
Far from a novice, Ed says he grew up in the recycling industry. He has used much of his college education, which includes a masters degree in applied mathematics, to not only strengthen the company’s day-to-day business but also to help Royal Oak Recycling to position itself for the future.
Changing the Model
In light of the slowdown in generation of paper, especially from printers, the company has aggressively pursued corporate clients to maintain and grow the volume of material it processes. Royal Oak also has expanded the recyclables it handles, notably adding plastics. In 2007, reflecting its growth into other commodities, the company changed its name to Royal Oak Recycling.
Royal Oak Recycling at a Glance
Officers: President Habib Mamou and Vice President Ed Mamou (pictured at top, from left)
Location: Headquartered in Royal Oak, Mich., with additional facilities in White Lake, Mich., Cleveland and Pittsburgh
No. of Employees: More than 100
Equipment: Commercial-grade balers and high-capacity shredders, supplied by Enterprise Co., Santa Ana, Calif., capable of processing 40 to 50 tons per hour are at each site. Several sites have guillotines for book cutting, roll splitters and roll cutters.
Services Provided: Collection, sorting, drop-off recycling, semi load, roll-off, brokerage/recycling marketing, bale route pickup, office recycling programs, secure shredding and product destruction, recycling system installation and maintenance and waste flow consulting.
“We are expanding and adding plastic separation equipment, which will upgrade and increase our plastic stream,” Ed says. “We are looking to add 100,000 square feet of warehouse space in Metro Detroit to process the volume that is already there. We are also working with local waste haulers, conducting trash audits to right-size and right-service their accounts,” he adds.
Along with expanding the focus of the materials it handles, Royal Oak also has broadened its geographic coverage. The company has opened locations in White Lake, Mich., Cleveland and Pittsburgh. Furthermore, Habib has taken small stakes in several other recycling companies, including Recycling Concepts of Grand Rapids, Mich., which has allowed it to provide even greater coverage.
Ed says, “We initially gained the processing contracts for Abitibi Bowater’s (now known as Resolute Forest Products) Paper Retriever program in Cleveland and Pittsburgh, which gave us the tonnage base and financial stability to enable us to grow.”
From this starting point, each of the locations now operates as stand-alone facilities, acting as drop-off sites for brokers, waste management and independent recycling firms—essentially any company that needs a partner to handle material, he says.
Additionally, all of the facilities provide secure, plant-based shredding services, trucking and collection services and can handle metal, plastic, fiber or electronic scrap. Hard-to-handle material is centralized at the company’s Royal Oak plant, which has unique capabilities, such as book cutting and additional metal and plastic processing.
Ed mentions the company’s partnerships with Recycling Concepts and Recycling Makes Cents, Windsor, Ontario, saying, “These businesses and partnerships have allowed us to work from other sites while growing our customer base, servicing national and international accounts, building a sustainable model for the future and providing basic services for contract corporate customers.”
To accommodate this growth, Recycling Concepts purchased a baler from Enterprise Co. as well as a 50,000-square-foot building in Grand Rapids.
Responding to Customers
Along with expanding the types of material it handles, Royal Oak Recycling also has found opportunities in ancillary businesses. It successfully entered the document storage industry to complement its document destruction business.
“The key to sustaining our business is being diverse and able to handle customer demands,” Ed says.
“In 1999, we assembled properties across the street from Royal Oak Recycling. In 2001, Royal Oak Storage opened based on customer demands for self-storage in the Royal Oak area and the needs of many current customers for records management,” he says.
“We now have more than 120,000 square feet of warehouse space dedicated to records management, self-storage and truck rental and warehousing,” Ed continues. “This has allowed us to grow our customer base by providing them with both document shredding and document storage as a bundled service. It is one more way we have been able to be a one-stop shop for our customers,” he notes.
The combined effect of adding to Royal Oak’s services, locations and materials handled is that the company currently processes more than 300,000 tons of recyclables per year.
Despite Royal Oak’s growth and diversification, it still faces challenges, perhaps the biggest of which is the long-term decrease in fiber products, Ed says.
“Since the printing markets have decreased, we have consequently gone after the corporate markets for fiber,” he says. “The challenge of this market is distinguishing our company from the competition when the customer views you as another trash hauler and simply wants to get the materials out of their building at the lowest cost.”
Ed continues, “We continue to increase volume in other materials, such as plastic, metal and electronics, to balance out the decrease in fiber while constantly looking for new fiber sources. Diversifying our locations and reaching out to a broader, national market helps to maintain our growth.”
The author is senior editor of Recycling Today and can be contacted at email@example.com.
For more about this story, watch the video www.recyclingtoday.com/habib-mamou-interview.aspx.
Is gold the locomotive of precious metals prices? Or does it run on a separate track from other precious metals? And how does it compare with base metals, such as ferrous scrap?
There is little doubt that the lofty price of gold has affected scrap trading. One of the traditional rules of thumb cited in precious metals trading is the silver-to-gold price ratio. During the last 30 to 60 days of 2012, the silver-to-gold price ratio hovered just above 50:1, meaning it would take approximately 50 ounces of silver to equal the price of one ounce of gold. That ratio reached nearly 53:1 in mid-November.
Taken alone, it is a meaningless metric. In historic context, the silver-to-gold ratio throughout the past decade has been anywhere from a high of 83:1 to a low of 31:1. That would indicate that the ratio as of mid-November is roughly in a middle range.
Some observers scoff at the ratio. They maintain that the whole idea of a silver-to-gold ratio is a dated concept, going back to the days when the U.S. government’s currency was based on gold bullion and the mint issued silver certificates in place of dollar bills.
The absolute price of gold was floating in the range of $1,700 to $1,725 per ounce in mid-November, while the price of silver was in the $32 range. During that same time, platinum was selling at $1,537 per ounce, and palladium was in the neighborhood of $600 per ounce.
While recyclers typically hedge each purchase and do not stockpile metals to speculate on the markets, the question of price ratios is more than academic because many of those selling various metals have an eye on prices. Hoarded supplies from small-time generators and jobbers tend to show up for recycling when prices make headlines. Popular press articles trumpeting record prices for gold or platinum have a way of bringing other metals out of storage and onto the market—even if those other materials are not moving in tandem with the record-setter.
Bill Rockett, vice president of M&K Recovery Group, North Andover, Mass., says the high price of gold has had a slight impact on prices for other metals. “But it hasn’t made things jump through the roof,” he adds.
He says people who run across precious metals in small volumes have been more aggressive in their pricing and processing demands. M&K’s regular customers, however, conform to the norm, riding each surge and dip in price as part of the normal cycle. “Our regulars are keeping to their business plans,” Rockett says. As a result, M&K has seen no major increase or decrease in the supply of material being shipped to the company for processing.
The scenario is similar at Universal Scrap Metals Inc. in Chicago, where Jack Whalen says he sees a preponderance of silver come through the company’s precious metals department. He says the flow of silver tends to be steady, coming as it does from busy medical facilities processing X-ray film and publishers who still use film for graphics. They are not speculating, he says, rather converting a resource to cash.
“That supply of silver is drying up since everyone is going to digital,” Whalen adds. That said, silver prices in the $32 range have attracted attention.
“Everything is at historic highs,” says the president of another Great Lakes-area metals firm. “Values are up across the board.”
Whalen says, “Every day is a different day. We have several jobbers who buy from the smaller places and sell to us.” Those customers are price sensitive, he says, but most of the larger generators of silver move their scrap material out the door as it is generated.
Some sources say more than 95 percent of all of the silver ever mined has already been consumed. That silver is gone forever, unrecoverable at any price. As virgin, mined supplies dwindle, there is more pressure to draw silver—and other precious metals—from the recycling stream.
The quality of the material in the recycling stream may not be everything a recycler could want, however. Volumes are up, in particular, in the lower grade materials. It seems that any of the top-grade material that was stockpiled was lured off for recycling long ago. However, as supplies got tighter for the top grades, the high value placed on any precious-metals-bearing recyclables made it worth the time and hassle to extract these metals from almost any source.
“The current prices make it viable to sell now because before it was not worth processing,” Whalen says.
Even the more prosaic metals—iron, aluminum and copper—are feeling the price pressure. The entire metals market seems to be buoyed by the high prices of gold and other precious metals.
“Ferrous, nonferrous and other metals have had more fluctuations [in pricing] than precious metals,” Rockett says. He points to the considerable volatility seen in pricing for metals such as copper and aluminum.
Yet, he says strong or weak precious metals markets are not necessarily a factor in the price swings of nonferrous materials. “I would not say they are related,” Rockett adds.
Whalen sees a similar situation. Universal does more business in the basic metals and colored metals than it does in precious metals. He sees those base metals reacting more to the price of a particular related commodity than to the sky-high levels of precious metals such as gold.
“We see a lot of copper, aluminum and brass,” Whalen explains. “When the market goes up, they sell off. If copper, for example, drops 40 or 50 cents a pound, they will sit on it.”
Someone with copper will keep an eye on copper prices—not gold or silver prices.
“After a year, if the market is still trading down from its highs, they will trade it off, if for no other reason than sheer space availability,” Whalen says. Machine shops, for instance, might hold copper or brass until there is an uptick in price. But, they can store only so much material because of space restrictions before they have to send it to market. Copper has been all over the map this year, starting in the $3.30-per-pound area, touching $3.90 in late winter, dropping back to the $3.30-to-$3.40 range in the summer and finishing the year somewhat healthier in the $3.50 range.
The copper run-up in March paralleled a rise in the price of gold, which hit highs near $1,800. The October jump in gold prices, again approaching $1,800, did not seem to have as much of an effect on copper the second time around, though copper did bounce one dime at the same time.
The value of the U.S. dollar can make more of a difference in gold and silver prices than in the prices of other metals. In early November, when the dollar hit lows against the Indian rupee, purchases of gold by Indian buyers jumped. India is the world’s largest consumer of gold.
At the same time, gold prices had fallen from October highs in the $1,800-per-ounce range to the low $1,700s and then into the upper $1,600s. If there ever was a “buy” signal for Indian consumers, the lower price of gold and the higher value of the rupee became a beacon for those looking to purchase gold.
Platinum paralleled silver more closely than gold in 2012, with the same run-up in March that most precious metals experienced. It topped off just below $1,700 per ounce before diving to $1,550 per ounce in May and continuing down to less than $1,400 in early summer. By August, platinum still hovered near $1,400 per ounce (with one spike). But the fall saw prices move to $1,700, again before dropping in November to the $1,550 range.
Palladium started 2012 down from its fall 2011 price range above $650 per ounce, dropping below $575. However, it bounced back to $650 in February and traded between $680 and $720 for most of the spring, with some minor exceptions. The price took a quick dive in May, dropping below $600 per ounce and trading near $575 for much of July and August. In September, the price nudged to $700, took a breather, then came back to $675 in early October before continuing to drop to the $590-to-$620 range as November progressed.
While platinum was setting lows in February, palladium was nearing an annual high. Both experienced declines into the summer months, however, and both showed real life, in terms of pricing, in October.
Gold, silver, platinum and palladium all experienced the late summer run-up, even though their industrial uses vary. (Platinum and palladium are used similarly in automotive catalytic converters.)
However, available supplies of recyclable metals fluctuated very little.
Down the Road
“I don’t foresee any softening in the prices of gold, platinum or palladium,” Rockett asks. His outlook for 2013 is that all of the precious metals will fluctuate in roughly the same price ranges that they moved in late in 2012.
“Will they all lose $100 an ounce?” Rockett says. “I’d say no.” He bases his outlook on supply and demand. “The market for precious metals, fundamentally, is economics driven,” he continues.
Rockett notes that there might be a dozen reasons for the price of gold—or any material—to move up or down. People can point to each or any of those factors and be correct in their analysis.
One of those factors is politics. Whalen notes that all metals will move one way or the other in the postelection climate. “Supply and demand plays a big role,” Whalen says, “but other factors like regulations [and] political outlook affect prices.”
Where the price of gold, silver, platinum and palladium go in 2013 is anyone’s guess. Most industry sources say that if they could pick metals prices with any accuracy and consistency, they would be on a beach somewhere sipping umbrella drinks.
For commercial recycling operations, the tried-and-true approach of being conservative in outlook and working the margin game remains the best approach in 2013. While it is fun to overlay charts of copper price movements on gold prices, or to compare silver price movement with that of palladium, the truth is that the market sets commodity-specific prices every morning and closes in the evening at a level specific to that metal. Trying to play a guessing game based on price movement of other commodities is for the speculator—not for the recycler, who is in business for the long-haul.
The author is a contributing editor to Recycling Today based in Cleveland. He can be contacted at firstname.lastname@example.org.
Following in line with its rate of gross domestic product (GDP) growth, the rate at which China produces copper is still growing, but not as fast as during the peak years of 1998 through 2011.
Figures maintained by China’s central government show the country is likely to finish 2012 with GDP growth in the 7.7 percent range. Likewise, its production of copper and its consumption of copper-bearing scrap are likely to increase in 2012 and in 2013, but not at the dizzying rates seen several years earlier.
For scrap recyclers in the United States, stoking China’s secondary copper furnaces for the past several years has provided a helpful outlet during a time when the domestic metals production industry—and particularly metals products heading into the construction sector—has not been particularly healthy.
Since the financial crisis and subsequent manufacturing downturn reached its trough in early 2009, many manufacturing sectors have clawed toward better health, but construction has remained bedridden.
Heading into 2013, some factors are pointing to a modest recovery of the construction “sick patient” beginning to take place, which would be helpful to U.S.-based producers of copper wire, cable and tubing, brass rod, pipes and fixtures and the scrap processors who supply them.
Glowing Red in China
Intermittently in 2012, red metals buyers and sellers continued to ride the roller coaster caused in part, many copper producers and recyclers say, by copper’s status as an investment product on the commodities market.
On the London Metal Exchange (LME) in 2012, copper traded for as much as $8,655 per metric ton ($3.97 per pound) in February before falling to its low, thus far, of $7,251 per metric ton ($3.32 per pound) in June.
Secondary copper production statistics in China point to copper-bearing scrap remaining in demand there. Although annual copper production figures are starting to rise more slowly, they continue to climb.
At the 2012 CMRA (China Nonferrous Metals Industry Association Recycling Metal Branch) Recycling Metal International Forum in Beijing in November, Hank Qiu, a senior consultant with the China branch of the New York-based International Copper Association (ICA), noted that some 22.1 million metric tons of copper was consumed globally in 2011, with nearly 30 percent (9.75 million metric tons) of that consumed in China.
For the past 15 years, both state-owned enterprises and entrepreneurs have been furiously adding copper production capacity—much of it secondary copper production—to keep pace with that consumption.
As China embarks upon its 12th five-year plan for its economy in 2013, more metals production is forecast, with sustainability initiatives such as the “circular economy” and “scientific development” favoring the ongoing use of scrap materials.
China’s reliance on copper-bearing scrap is well-documented in the business media, but actions by customs and inspection agencies in China often cause recyclers in the U.S. to wonder why the message has not filtered down.
At a presentation at the Electronics Recycling Asia conference, held in Guangzhou, China, in November of 2012, Professor Yangzu Wang of China’s Ministry of Environmental Protection assured an audience of recyclers that imported scrap materials have been greatly appreciated.
Wang noted that in the second half of the 20th century, the United States had 5 percent of the world’s population but consumed anywhere from 30 percent to 60 percent of the world’s resources, depending on the particular commodity.
In the new century, China has grown rapidly as a manufacturer and as a consumer of raw materials. “We manufacture the most but only have 50 percent of the raw materials we need,” Wang commented. “We need to import natural gas, copper and so on.”
These two historical factors have come together in the form of the U.S. shipping high volumes of obsolete and scrap materials to China, where they can be used as raw materials.
“In the past 20 years, 360 million tons of recyclable materials have been imported into China,” Wang said, including 180 million tons of scrap paper, 70 million tons of metal and 50 million tons of plastic scrap.
These scrap resources have been critical in many ways, he said, “providing jobs to 1 million people and saving 80 percent of the energy” that would have been consumed using primary materials. The scrap resources that have poured into China have provided “positive social, economic and environmental benefits” the Ministry of Environmental Protection official stated.
Repair and Replace
Business owners and managers don’t set up their companies to take advantage of natural disasters, but in some cases it becomes a byproduct they did not request.
Repairing the damage in the Northeast caused by Superstorm Sandy included a lot of electrical grid work initially and will entail considerable rebuilding in the following months.
A Newsweek report noted that electrical power provider “Jersey Central Power & Light had to replace 6,000 poles and over 400 miles of wire after Sandy.” And the New Jersey utility was just one of several affected.
A report in USA Today refers to “armies of flatbed trucks stacked with the 40-foot long poles rolling across U.S. highways to reach the affected areas and replace utility poles knocked down or splintered by Sandy.”
The North American Wood Pole Council, contacted by USA Today, estimates that “the number of new utility poles sent to areas ravaged by Sandy is on pace to match what was delivered after Hurricanes Katrina and Rita in 2005 [when] suppliers dispatched about 100,000 poles to the devastated Gulf Coast.”
Reconnecting those replacement polls to the grid will entail miles of electrical cable and considerable numbers of transformers and other electrical units.
Wang said China is by no means done importing scrap materials and may have room to expand its imports in such areas as ferrous scrap for steelmaking.
Among the challenges facing scrap importers are differences in customs regulations between the European Union, with 70 different types of scrap materials listed on manifests, and China, where only around 20 types of scrap have approval to enter the country.
Even after all scrap materials have done for China, Wang said “prejudices” remained in the minds of some people in the country. “Some people believe importing recyclables is importing garbage, [but] just 0.09 percent in 2011 of shipped materials were not acceptable. It is not importing garbage—this is wrong,” he stated.
At the same event, Institute of Scrap Recycling Industries Inc. (ISRI) President Robin Weiner referred to the status of the U.S. as the world’s largest scrap exporter. In 2011, the U.S. exported some $39.2 billion in scrap materials, with $11.5 billion of that total heading to China. She also said some 3 to 4 million tons of electronic scrap are now collected annually in the U.S., with “75 percent from the commercial or business sector.”
The harvest of copper gained from electronic scrap processing is helping to fill global demand at a time when overall red metal scrap supplies are tight.
Closer to Home
In good and in bad economic times, scrap recyclers have long experienced a consolidation in domestic melting destinations for copper-bearing scrap.
A lack of options on the domestic sales front has been especially acute since the construction industry went into a swift and long-lasting slowdown that started in late 2007.
Only at the end of 2012 are construction industry associations using terms like “solid improvement” and “modest gains” as they analyze industry activity in the fourth quarter of the year.
In a news release summarizing October 2012 construction data, the Associated General Contractors of America (AGC), Arlington, Va., says, “All major segments of construction spending increased in October, bringing total spending to a 37-month high at an annualized rate of $872 billion.”
Ken Simonson, AGC chief economist, says, “Widespread gains in spending in October, along with hefty upward revisions to estimates for the previous two months, show that construction has finally come out of its long slump. Although all major spending categories are far below prerecession highs, they are well above their recent low points.”
Simonson says total construction spending rose for the seventh consecutive month in October, up 1.4 percent from September’s total and 9.6 percent from October 2011.
Private residential spending reached the highest level since November 2008, increasing by 21 percent during the past 12 months. Private nonresidential construction edged up 0.3 percent for the month and 11 percent compared with October 2011. Public construction rose 0.8 percent in October but has slipped 1 percent year-over-year.
The Associated Builders and Contractors (ABC), also based in Arlington, summarized the same U.S. Census Bureau October figures as “a modest gain,” adding that “total nonresidential construction spending—which includes both private and public projects—is up 5.1 percent compared to one year ago.”
The ABC also released its 2013 economic forecast for the U.S. commercial and industrial construction industry, saying “it shows the continuation of a modest recovery for nonresidential construction next year.”
ABC Chief Economist Anirban Basu says, “Thanks to a handful of segments experiencing more rapid economic recovery, much of the construction expansion next year will be in categories heavily associated with private financing.”
Basu continues, “Consumer confidence also has progressed. Accordingly, ABC predicts total commercial construction will expand roughly 10 percent next year. Other industries positioned to experience rising levels of investment include power, up 10 percent; lodging, up 8 percent; health care, up 5 percent; and manufacturing, up 5 percent.”
Scrap recyclers in the United States will be among the first to know, if additional electrical, plumbing and building contractor scrap starts crossing their scales, that the construction industry is finally experiencing an upturn.
The author is editorial director of Recycling Today and can be contacted at email@example.com.
After a rapid price spike in 2011, users of rare earth metals quickly began considering how to best recycle the current above-ground supplies of these metals. However, despite their increase in value and common use in some types of electronics, how to profitably recycle rare earth metals and other minor metals has remained elusive.
In his 2007 book The Ingredients: a Guided Tour of the Elements, British chemist and author Philip Ball says a series of 14 elements with atomic numbers 57 through 70 are known on the periodic table as lanthanides and also by the label rare earths. Ball also notes that this second label is “a misnomer, for some are not particularly rare at all and they are metals, not earths.”
To further cloud things, recyclers and consumer electronics companies, when talking about reaching deeper into the obsolete electronics stream to recover materials, often lump other minor metals, such as cobalt, lithium and indium, into the rare earths category.
No matter how broadly they are defined or how their value rises or falls, interest in recovering metals beyond iron, copper, aluminum and precious metals from electronic scrap has strengthened, and progress is being made.
A Spike in Interest
A panel convened at the Electronics Recycling Asia conference, held in Guangzhou, China, in November of 2012, included comments from several panelists who pointed to significant barriers that remain before widespread recycling of rare earth metals can occur.
Freelance journalist Adam Minter moderated the panel and noted that prices for rare earth metals spiked in late 2010 and early 2011, then subsequently drifted back downward. “These kinds of price cycles will determine how much recycling takes place,” Minter said.
Professor Jinhui Li of China’s Tsinghua University commented that rare earths deserve their “rare” label, as the 130,000 metric tons produced in 2011 is a fraction of the 15 million metric tons of copper produced or the 1.5 billion metric tons of steel.
In an earlier presentation on rare earth metals recycling, Li noted that some 36 percent of the world’s rare earth metal reserves are believed to be in China, but that as of 2010 China’s mining activity was producing 94 percent of the world’s output.
From a mining viewpoint, panelist Christian Ekberg, a professor at Sweden’s Chalmers University of Technology, asked whether the potential supply of rare earth metals in the ground was especially lacking or whether regulations prohibiting mining are “the source of the problem.” The regulatory climate toward mining in much of the world, he suggested, is why China is nearly the sole source of output of mined rare earth metals such as yttrium, cerium, europium and terbium.
Ekberg also said rare earth metals “are rare because they are difficult to separate; this is why universities are involved—it is a challenge.”
Crystynna Ewe, the Singapore-based head of take-back for the Asia Pacific and Japan region for Dell Inc., said rare earth metals recycling “was a very new topic” for Dell, though the company considers product life cycles important and favors use of recycled content.
While some panelists and audience members expressed optimism that technological solutions to boost rare earth metals recycling will soon develop, Ekberg cautioned, “Technology will not automatically catch up. It is difficult to separate lanthanides from other materials. The technology is not emerging very fast, I must say.”
Li also pointed to attempts thus far to recover indium from LCD (liquid crystal display) monitors. At the current price of indium, “you’re going to lose money if you recycle it,” Li said.
At the previous year’s forum, held in November 2011 in Hong Kong, one of Ekberg’s students offered an overview of his research into using solvents to isolate indium while recycling LCD screens.
PhD student Yang Jiaxu of Chalmers University of Technology said, “LCD is the most sold type of display today and will consequently be a major portion of [electronic scrap] in the near future.”
In his experiments, Yang was able to use solvents to extract indium from other metals and materials, “although the separation of indium from zinc seems to be the most difficult,” he added.
Light and Attractive
Rare earth metals have become an important part of the economy in several different ways, though the two most widespread applications involve magnets, lighting and electronic image display.
Rare earth magnets, also known as permanent magnets, are used in the mining and metals recycling industries, so each of these two sectors has a direct interest in maintaining their availability and affordability. The two most common permanent magnet configurations use either neodymium or a samarium-cobalt alloy as their key materials.
Neodymium rare earth magnets have the biggest market share, and permanent magnets made with neodymium often include fellow rare earth metals terbium and dysprosium in their chemistry mix.
On the lighting and visual display side, europium, yttrium and terbium each have qualities of phosphorescence or fluorescence that make them ideal at transmitting certain colors in the light spectrum.
Although they are used in trace amounts per LCD screen or per fluorescent lamp, they can be found in every such screen, light tube or light bulb that is recycled. Whether they can be extracted, purified and aggregated in a way that makes economic sense remains the critical question, however.
Part of the Process
Whether they are decades old or recent startups, many equipment makers who presented at the Electronics Recycling Asia conference, held in November 2012 in Guangzhou, China, say they can offer improved processing methods to recover rare earth metals.
Joe Yob of Creative Recycling, Tampa, Fla., offered the viewpoint of a customer of the BluBox fluorescent lamp recycling system. The BluBox, made by Switzerland-based BluBox Trading AG, is designed to safely recover mercury from several types of obsolete items.
Yob said Creative is using its BluBox to recycle “fluorescent tubes, compact fluorescent lamps, halogens, notebook computers and mobile phones.” The batteries of devices are removed first, he noted.
Materials recovered using the BluBox include ferrous, glass, nonferrous, circuit board scrap, plastics and “lamp powder that contains rare earths.”
Thomas Langer of German lighting company Osram AG said his company’s system for recycling fluorescent lamps includes the ability to recover rare earth elements in the form of a powder.
“Europe has established quite a good collection system for end-of-life lamps,” said Langer, adding that Osram’s goal has been to capture these materials for reuse.
“We are in a new stage,” Li said at the 2012 Electronics Asia Forum. “In the past, we were doing some ‘easy’ recycling. We are evolving,” he stated, adding that China’s government and recycling industries are now delving deeper to address the challenges and opportunities of recycling rare earth elements from the obsolete electronics stream.
Li said current efforts result in “a very serious waste of rare earth elements, and we need policies for the future.” Citing metals such as cobalt and lithium as well as rare earth elements, Li added, “The demand remains significant, so we do need to do significant work and have set policies. There is great room for improvement [and] new technologies.”
In Europe and North America, investments have been made to begin that improvement process. In October 2012, Brussels-based Solvay Group announced that it had opened two rare earth metals recycling plants in France. The two plants are designed to allow the company to diversify its supply of rare earth metals and preserve resources.
Solvay says it has developed a process to recover rare earth metals from end-of-life products that include new low-energy light bulbs, batteries and magnets. The company says it focuses on low-energy light bulbs because the recovery channels already exist. The light bulbs have six different rare earths—lanthanum, cerium, terbium, yttrium, europium and gadolinium—which Solvay says it is positioneed to recycle “while preserving 100 percent of their functional properties.”
The luminescent powders recovered are shipped to a Solvay Group facility in Saint-Fons, France, where the rare earth concentrate is extracted. The material then is sent to a Solvay rare earth metals recycling plant in Charente Maritime, France, which is equipped with additional separation technology. The separated rare earth metals are “reformulated into luminescent precursors to be reused to manufacture new lamps,” Solvay says.
In Pennsylvania, AERC Recycling Solutions is working with Global Tungsten & Powders (GTP) to recover rare earth metals from spent fluorescent lamps.
AERC and GTP started working together in 2008 to develop a process to recover rare earth materials from fluorescent lamps processed at the AERC facility in Allentown, Pa.
According to the two companies, AERC’s mercury retort process is followed by a process in which the mercury is removed prior to the recovery of rare earth metals. The AERC facility in Allentown is less than 150 miles from GTP’s plant in Towanda, Pa.
Judging by the amount of capital being invested and the time being dedicated to research throughout the world, the rare earth metals recycling frontier is the site of considerable activity.
At the Electronics Recycling Asia event, Dr. Hyun Seon Hong, executive director of South Korea’s Institute for Advanced Engineering, spoke about that country’s liquid crystal display (LCD) and other flat panel recycling efforts.
Recycling challenges include fasteners that make dismantling difficult and the “uncertain” value of fractions such as glass and the minor metal indium.
Hong said the Institute for Advanced Engineering is researching these challenges, since the recycling of 13,000 tons of obsolete electronics can result in 12,000 tons of CO2 emissions reductions.
Dr. Manis Kumar Jha of the CSIR-National Metallurgical Laboratory, Jamshedpur, India, said CSIR, in cooperation with a South Korean research institute, has developed a hydrometallurgical “organic swelling” treatment that offers an environmentally safe way to extract precious metals from obsolete circuit boards.
He added, “Steps for the extraction of rare earth metals from secondary sources are proposed to be done in future.”
If the effort is enough to lead to improvement, the recycling rate for rare earth and minor metals found in the scrap stream seems destined to increase.
The author is editorial director of Recycling Today and can be contacted at firstname.lastname@example.org.