SDI reports slimmer 3Q profits
Steel Dynamics Inc. (SDI) has announced third quarter 2015 net income and sales figures that have dropped in comparison to the third quarter of 2014.
The Fort Wayne, Indiana-based electric arc furnace (EAF) steelmaker reported net income of $61 million, or 25 cents per share, on net sales of $2 billion. That compares with third quarter 2014 net income of $91 million (38 cents per share) on net sales of $2.3 billion. The sales figure is on par with SDI’s second quarter 2015 net sales of $2 billion.
SDI’s metals recycling operations recorded 3Q 2015 operating income of $463,000 compared with 2Q 2015 operating income of $12 million. Sequential quarterly ferrous pricing was down 3 percent and procurement costs rose, resulting in a 14 percent reduction in metal margin. Additionally, nonferrous market indices fell more than 10 percent in the third quarter 2015, resulting in a 20 percent reduction in metal margin. The poor results occurred before the sharper decline in ferrous scrap pricing of early October 2015.
Regarding steel industry conditions, SDI CEO Mark D. Millett says, “Ongoing pressure from steel imports remains high, negatively impacting steel pricing and domestic steel production, resulting in industry utilization not fully reflecting the actual strength in U.S. steel consumption. The automotive market remains strong and construction continues its steady improvement. However, customer steel inventories remain at elevated levels and, when combined with further declining scrap prices, have resulted in hesitant ordering.”
He adds, “As scrap prices stabilize at these lower levels and steel inventories moderate to more normalized quantities into 2016, we believe domestic steel production should improve.”
Millett says the operating environment may be at least as difficult in the fourth quarter in light of elevated domestic supply chain inventory, the continuation of excessive steel imports and typical 4Q quarter seasonality.
SCA plans to acquire Wausau Paper
SCA, a global hygiene and forest products company based in Stockholm, and Wausau Paper Corp. of Mosinee, Wisconsin, a producer of away-from-home tissue products, have announced that SCA will acquire Wausau Paper for $10.25 per share, or roughly $513 million in cash.
Both companies’ boards have approved the merger agreement, representing a premium of 40.6 percent to Wausau Paper’s closing price on Oct. 12, 2015, and a premium of 11.3 percent to the Wausau Paper 52-week volume-weighted average price.
Wausau Paper is one of the largest away-from-home tissue companies in North America. With approximately 900 employees, the company manufactures and markets away-from-home towel and tissue products along with soap and dispensing systems. The company says its manufacturing processes allow for production of towels and tissue using only recycled paper.
Following completion of the acquisition, SCA says it will continue to honor Wausau Paper’s existing customer contracts and programs.
Wausau Paper’s reported sales for the first half year 2015 equalled $75 million. In 2014, Wausau Paper’s reported sales amounted to $352 million.
The completion of the transaction is subject to Wausau Paper shareholder and regulatory approvals. The Wausau Paper board will recommend that its shareholders vote in favor of the acquisition by SCA. Closing is expected to take place during the first quarter of 2016, according to the companies.
ISRI urges EPA to address synthetic turf safety concerns
The Institute of Scrap Recycling Industries (ISRI), Washington, has released a letter it sent in October to U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy calling for a response to public concern over the safety of synthetic turf made with crumb rubber. This concern has arisen from media reports seeking to correlate recycled rubber in turf and adverse health effects, despite more than 75 studies indicating otherwise, ISRI says. The letter, signed by ISRI President Robin Wiener, aims to ease such concerns.
ISRI states, “Contrary to many of these ambiguous stories, there has been extensive research over the past 22 years and more than 75 independent, peer-reviewed studies focusing on the health effects of synthetic turf fields and playgrounds containing crumb rubber from recycled tires, and, the fact is, these fields are safe. These studies have pointed to the conclusion there is no indication of negative health effects tied to crumb rubber’s use in artificial turf.”
The letter mentions EPA’s 2009 research on the subject, noting “levels of particulate matter, metals and volatile organic compound concentrations in wire sample above synthetic turf were similar to background levels, and all concentrations of particulate matter, zinc and lead were below levels of concern.”
ISRI describes tire recycling as “an economically sound and environmentally friendly activity,” adding that 103 million scrap tires were recycled in the U.S. in 2014.
“Recycling scrap tires into new innovative and safe products is an important economic and environmental success story that should be shared,” ISRI says. “We respectfully ask EPA to respond to the concerned parents and the public at large highlighting the extensive research, including EPA’s own studies, which establishes no connection between synthetic fields containing crumb rubber from recycled tires and public health hazards, including cancer.”
AFRA, Boeing and Aircraft Demolition partner on demonstration project
The Aircraft Fleet Recycling Association (AFRA), Washington, says it recently joined with Boeing and an AFRA-accredited airplane demolition company to disassemble and recycle the Boeing ecoDemonstrator 757 airliner using environmentally responsible best practices.
Following the 757’s demolition, less than 10 percent of the airplane’s total weight—filling a single 15-yard dumpster—was labeled as waste or sent to a landfill, AFRA says.
The AFRA-accredited company Aircraft Demolition LLC, Burnsville, Minnesota, was selected by Stifel, the owner of the aircraft, to conduct the airplane’s disassembly and materials recycling at the Grant County International Airport in Moses Lake, Washington.
“This joint project was a great way to showcase the AFRA ‘Best Practices Manual’ on how to perform a proper end-of-life program of an airliner,” says Tim Zemanovic, chief executive officer of Aircraft Demolition LLC and its sister company Jet Yard LLC.
“The ecoDemonstrator disassembly was a powerful opportunity for AFRA to showcase the approved and accredited maintenance process for the removal of reusable parts; proper handling, packaging and preservation of spare parts; and the documentation to support traceability,” says Reed Hitchcock, executive director of AFRA.
Certified maintenance technicians with Aircraft Demolition spent more than a month in Moses Lake, preparing for the teardown and disassembly of the 30-year-old Boeing 757 airliner. All recycling processes followed the AFRA “Best Practices Manual” and were concluded in fewer than 30 days.
SAFETY, LEGISLATION & REGULATIONS
ISRI allies with OSHA
The Institute of Scrap Recycling Industries (ISRI), Washington, and the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) have formed an alliance to promote health and safety in workplaces throughout the recycling industry. Through the alliance, ISRI says it will team with OSHA to provide its members and others with information, guidance, training and other resources to protect the health and safety of workers within the scrap recycling industry.
One of the alliance’s goals is to promote a safety culture within the scrap recycling industry that reduces workplace incidents and prevents workers’ exposure to hazards. This includes hazards associated with powered industrial trucks and other machinery, insufficient hazard communication, lead, improper electrical wiring methods and control of hazardous energy. Injury, illness and hazard exposure data will be used to prioritize areas of emphasis for alliance activities, according to ISRI.
ISRI says alliance activities likely will include:
- raising awareness of OSHA’s rulemaking and enforcement initiatives;
- training and education, including improving existing resources to promote greater use and improved safety outcomes, as well as the development and dissemination of new tools, in different languages as appropriate; and
- communications and outreach.
ISRI and OSHA will collaborate on events, such as ISRI Safety and Environmental Council (ISEC) meetings, ISRI’s Safety Stand-Down Day and ISRI’s annual convention, to provide compliance assistance for attendees and to promote and distribute available safety resources. They also will include information within publications regarding cooperative programs, and ISRI will help OSHA promote initiatives such as its Fall Prevention Stand-Down Day, workplace safety and health management systems and its heat illness prevention campaign.
2014 US PET container recycling rate inches upward
The National Association for PET Container Resources (NAPCOR), Florence, Kentucky, and the Association of Plastic Recyclers (APR), Washington, have released the “Report on Postconsumer PET Container Recycling Activity in 2014,” revealing a 2014 U.S. recycling rate of 31 percent for polyethylene terephthalate (PET) bottles.
Gross exports of PET fell again in 2014, continuing a five-year trend, while total pounds of recycled PET used in domestic end markets increased to the highest level seen to date, according to the report.
“We continue to see strong domestic demand for recycled PET in fiber, sheet, bottles and other end market sectors, with more than 773 million pounds of clean, processed recycled material closing the loop by going back into the production of PET bottles and packaging,” says Tom Busard, NAPCOR chairman, chief procurement officer for Plastipak Packaging Inc. and president of Clean Tech, Plastipak’s recycling affiliate.
The total volume of PET bottles collected increased to 1,812 million pounds in 2014, while the volume of PET bottles potentially available for recycling increased to 5,849 million pounds.
Export purchases of PET bottle bales in 2014 were at their lowest level since 2004, declining 14 percent from the significant reductions reported in 2013, according to the report. Exports represented 23 percent of total postconsumer PET volumes collected in 2014, the lowest percentage of domestic material purchased by exporters since that reported in 2000.
Total domestic use of recycled PET increased from 1,513 million pounds in 2013 to 1,564 million pounds in 2014, which the associations say is a record high, with significant gains in the fiber and sheet market categories.
NAPCOR and APR say they continue to work to address ongoing challenges, with particular focus on how to maximize PET capture from the waste stream, reduce non-PET contamination in recycling streams and encourage awareness of “design for recyclability” principles.
ELECTRONICS, LEGISLATION & REGULATIONS
OSHA says Kuusakoski’s Plainfield, Illinois, workers exposed to high levels of lead, cadmium
Workers separating circuit boards at a Plainfield, Illinois, electronics recycling facility were found to be overexposed to high airborne concentrations of lead and cadmium, putting them at high risk for long-term damage to the central nervous, urinary, blood and reproductive systems, according to U.S. Department of Labor Occupational Safety and Health Administration (OSHA).
OSHA inspectors determined that Kuusakoski US LLC failed to implement engineering controls and monitor employee exposure to these hazards, the agency says.
Kuusakoski received 26 serious OSHA health violations Sept. 28, 2015, including overexposure, according to the agency. Proposed penalties total $114,800.
“Lead and cadmium can cause irreversible health damage, but Kuusakoski’s compliance programs lack information on controlling exposure levels and protecting workers through common-sense safety measures like wearing respirators and protective clothing,” says Kathy Webb, OSHA area director in Calumet City, Illinois. “The company must protect the long-term health of employees exposed to these dangerous metals,” she adds.
OSHA says it also cited Kuusakoski for the following violations:
- failing to provide protective clothing;
- failing to train workers on lead, cadmium and chemical hazards;
- failing to implement a respiratory protection program;
- failing to implement a hearing conservation program;
- lacking housekeeping procedures to remove lead and prevent employee exposure; and
- not offering showers or a separate lunch facility to prevent lead contamination and ingestion.
Founded in Espoo, Finland, in 1914, Kuusakoski recycles metal and electronics, with operations on three continents. Plainfield is the site of its U.S. headquarters. The company is e-Stewards and ISO 14001 certified at Kuusakoski Philadelphia LLC, while its Plainfield and Peoria locations are contracted to be e-Stewards certified, according to the company’s website.
Alcoa to separate into two companies
Alcoa has announced that its board of directors has unanimously approved a plan to separate into two independent, publicly traded companies.
The separation will launch two Fortune 500 companies, according to Aloca: an upstream firm that will comprise five business units that today make up Alcoa Global Primary Products, bauxite, alumina, aluminum, casting and energy; and an innovation and technology-driven value-add firm that will include global rolled products, engineered products and solutions and transportation and construction solutions.
After the separation, the upstream company will operate under the Alcoa name. The value-add company will be named prior to closing.
Alcoa says the transaction is expected to be completed in the second half of 2016. At that point Alcoa shareholders will own all of the outstanding shares of both the upstream and value-add companies. The separation is intended to qualify as a tax-free transaction to Alcoa shareholders for U.S. federal income tax purposes, the company says.
Upon completion of the transaction, Alcoa CEO Klaus Kleinfeld will lead the value-add company as chairman and chief executive officer. He also will serve as chairman of the upstream company for the critical initial phase, ensuring a smooth and effective transition, Alcoa says.
After the separation, the upstream company’s footprint will include 64 facilities worldwide and approximately 17,000 employees. Its asset base will include the world’s largest bauxite mining portfolio, with 46 million bone dry metric tons of production in 2014.
After the separation, the value-add company will provide high-performance multimaterial products and solutions with 157 globally diverse operating locations and approximately 43,000 employees.
Alcoa says it is targeting the second half of 2016 to complete the separation, adding that it may abandon the separation or modify or change its terms at any time until the proposed transaction is completed.
MetalX acquires aluminum toll processing firm
MetalX, Waterloo, Indiana, has acquired the assets and business of Metal Shred Industries LLC (MSI), an aluminum scrap toll processor in Kendallville, Indiana. The MSI name has been retired, and the facility renamed MetalX.
The former MSI, founded in 2006 as an affiliate of Metropolitan Alloys, shreds aluminum scrap on a toll basis for a variety of customers in the aluminum sector. MetalX says the acquired company operates a “unique shredding and separation system that recovers and returns high-quality shredded aluminum products to its customers and has developed a reputation as the premier toll processor in the Midwest.”
At the time of purchase, MSI processed nearly 10,000 tons of aluminum annually. In a news release announcing the acquisition, MetalX says it intends to maintain MSI’s current toll processing relationships and volumes and also plans to expand operations to include open market purchases.
Over the next several months, MetalX estimates that annual volumes at the former MSI facility will increase to more than 20,000 tons, serving as a key element of its ongoing efforts to develop new and more refined aluminum scrap products.
“The addition of this operation fits perfectly into our aluminum strategy,” says MetalX CEO Danny Rifkin. “The facility was specifically designed to shred and separate a broad range of scrap aluminum items and will accelerate our current plans to employ more sophisticated technologies to produce aluminum scrap products that can be represented with more consistent physical characteristics and chemistries.”
Gil Spilman, a principal of the former MSI, comments, “This is a good fit for both parties as it will allow us to concentrate on our aluminum melting operations at nearby Aluminum Recovery Technologies while still maintaining a close working relationship with a strong scrap processor right next door. I’m pleased with the transaction and look forward to an expanded business relationship with MetalX.”
Aluminum Recovery Technologies runs a secondary aluminum facility in Kendallville that performs specialized processing and produces secondary aluminum sows.
MetalX was founded in 2012 by Danny and Neal Rifkin, third- and fourth-generation members of a family with a long history in the scrap industry. MetalX now employs 170 people at four northeast Indiana facilities in Waterloo, Auburn, Kendallville and Fort Wayne.
Nestle to add How2Recycle Label
Nestle is the newest member of the How2Recycle Label program. Selected Nestle USA and Purina brands will use the How2Recycle label to help communicate to the public how to recycle their packaging.
The How2Recycle Label is a project of Charlottesville, Virginia-based GreenBlue’s Sustainable Packaging Coalition (SPC), developed to provide clear and concise on-package recyclability information and to keep recoverable materials out of landfills. The brands join more than 40 How2Recycle member companies using the label on packaging.
Nestle says it plans to phase-in the How2Recycle Label on many of their products in the upcoming months.
“We are very excited to welcome Nestle to the How2Recycle Label Program,” says Project Manager Danielle Peacock. “We look forward to helping their customers understand how to recycle their many products.”