Southern exposure

Recyclers, traders and processors from around the world convened in Miami, Florida, for the Bureau of International Recycling’s annual spring event focusing on the trade of secondary commodities.

July 7, 2014
Lisa McKenna

Though he described 2013 as a difficult year for the global scrap recycling industry, Björn Grufman, president of the Bureau of International Recycling (BIR), based in Brussels, said the organization welcomed more than 1,200 attendees from 63 countries to its 2014 World Recycling Convention in Miami, “a great achievement given difficult market conditions.”

The convention was 1-4 June, 2014, at the opulent Fontainebleau Hotel. The last time the BIR held its spring conference in the United States was in 2000, when BIR members and guests gathered in San Francisco. Grufman also highlighted the association’s decision to host the conference in Miami as based largely on the city’s central position with regard to Latin America.

Providing a look at how the recycling industry fared in 2013, Grufman said it was “the worst in many years.”

He explained, “The metals recycling industry witnessed reduced availability of scrap owing to lower levels of industrial activities and lower prices as a result of the overcapacity among our customers.” The outcome, he said: “an even larger overcapacity in our sector than in steel.”

Thin margins

During the Nonferrous Metals Session, Division President Robert Stein of U.S.-based Alter Trading, told attendees that margins for scrap processors continued to be compressed.

“Prices being paid don’t allow the merchants to replace what they sell at acceptable margins,” Stein said. He also referred to the creation of false internal prices and export restrictions as additional concerns.

Other persistent pressures on the nonferrous scrap industry—theft and fraud—were highlighted at the same meeting by the Chairman of the BIR’s International Trade Council Robert Voss, CEO of U.K.-based Voss International. Voss urged members to take advantage of access to the International Maritime Bureau’s database of information regarding fraud and other “ill-doings” which, he said, has already yielded specific benefits for his own business.

Guest presentations focused particular attention on developments in Latin America. Luis Fernando de Souza, raw materials corporate manager for Brazil’s biggest copper recycler, Paranapanema SA, remarked that domestic copper consumption has “huge space to grow.” He also identified a rising trend in Brazil’s copper scrap imports.

Fellow guest speaker Alejandro Jaramillo, founder of Mexico-based service provider for the international recycling industry Glorem SC and a long-time member of the BIR Non-Ferrous Metals Division board, talked of Latin America’s “demographic bonus” of a relatively young population and of Mexico’s labor efficiency. Among the challenges, Jaramillo said, is price distortion caused by some companies integrating value-added tax (VAT) into scrap prices.

Also during the session, Stein presented a commemorative plaque to Marita Sax, the widow of former BIR Non-Ferrous Metals Division President Larry Sax, in recognition of his contribution to the world recycling organization throughout more than 30 years.

Brighter outlooks

A positive note was sounded during the event’s Ferrous Division meeting, where presenters offered promising signs of improvement for that sector’s future performance.

Ferrous Division President Christian Rubach, an executive with Germany’s TSR Recycling, said although conditions were still challenging, the division had received a number of positive signs in recent weeks.

“Global apparent steel consumption is forecast to grow in 2014 compared to 2013 worldwide by 3 to 5%” Rubach said. But, he added, overcapacity in the sector will remain the biggest challenge.

Rubach said promising developments include a changing of the ranks within the European Commission and the fact that Robrecht Himpe, the incoming president of European steel association EUROFER and executive vice president at ArcelorMittal Europe, has spoken in support of free and fair trade.

WasteExpo 2014 session analyzes developments in anaerobic digestion

Understanding how to move anaerobic digestion (AD) projects forward was among the topics covered as part of WasteExpo 2014. The solid waste and recycling industry trade show, held annually each spring, took place 30 April-1 May at the Georgia World Congress Center in Atlanta in the U.S. Southeast. The event drew around 11,000 attendees.

Michelle Spruth, a project manager in the state of Illinois for Netherlands-based CB&I, shared the firm’s experience with implementing a dry AD facility at a landfill in Packington, U.K. The landfill there only had about 1.5 years of capacity left.

“Everyone wanted us to finish up landfilling and get out,” said Spruth. “Constructing a new waste treatment facility was a big [challenge for] them.”

CB&I put together a communications plan and looked at more than 200 sites before deciding to locate the AD facility at the existing landfill. Austria-based Strabag was selected as the AD technology vendor on the project.

Spruth detailed “Lessons learned” on the project, which included engaging regulators and stakeholders early; flexibility in design to accommodate local needs; and phasing of operation with other operations or surroundings.

“You have to plan for the long and short-term,” she advised.

Kyle Goehring, regional sales manager for Eisenmann Corp. at its U.S. office, shared how several large players in the private sector have waste reduction goals, some of which are aimed at food waste reduction.

Goehring showed that while 28% of municipal solid waste is made up of food waste and yard waste, a small percentage of food waste is being diverted. And for food processors and restaurants, a significant percentage of the waste stream comprises food. According to Goehring, the Hamilton, Canada-based restaurant chain Tim Horton’s conducted a waste audit and determined 69% of its waste was organic.

Eisenmann’s AD technology is a two-stage digester process, according to Goehring. The company is currently working on project in the state of California to process residential food and yard waste and to produce 1 million diesel gallon equivalents (DGEs) of compressed natural gas per year.

The Eisenmann digester is designed to accept between 0 and 50% solids. “Our technology really worked for them because it’s flexible,” Goehring said.

– Kristin Smith, Recycling Today Media Group

“The conditions have changed under which we work,” said Rubach, commenting that steel producers and federations seem to now recognize steel scrap in Europe is in surplus and that exports should not be restricted.

“Before that, we were regarded as unpatriotic scrap exporters working strictly for China or India,” Rubach said. “I hope that changes.”

Tom Bird, president of the European Ferrous Recovery & Recycling Federation (EFR) and U.K. managing director of Van Dalen Recycling, presented an overview of the European scrap markets. He said while there is more optimism for steel producers, the European domestic market remains challenging.

“Competition for material across all European regions remains very strong,” said Bird. “Margins are, therefore, under pressure in most areas.”

Bird said rationalization also is taking place, with some larger operations closing yards in certain regions. However, he added, smaller operations also were appearing to open in those same areas, which is what usually happens when significant closures occur for economic reasons.

Bird said political conditions in the Ukraine have led traditional customers of this steel market to turn to Turkey for their supplies, leading to increased demand from that country and improved prices. He also shared recent pricing comparisons between billet and rebar prices, reiterating his belief that the market continues to operate in a tight band.

It’s a good reflection he said “of how the prices still very much drive the price of scrap and vice versa.” Continuing exchange rate movements in relation to the euro and the British pound against the U.S. dollar, Bird noted, are having a dampening effect on the local monetary benefit of increased U.S. prices. But, he concluded, “There are definite signs of improvement across European Union economies.”

BIR Keynote speaker Jason Schenker, president of the U.S.-based financial research firm Prestige Economics, also provided a bullish view of the global recycling industry, at least in the short term. Schenker said he forecasts a three-year period of growth, with the economies of the U.S., Latin America and China continuing on modest growth paths.

“It’s really a 2017 window where we become a bit more concerned about the downside,” he continued, “but for now we see a story of modest growth playing out, and this is going to have a huge impact on commodity prices, metals especially.”

Schenker said Prestige analysts expect 2017 to bring upside risk for inflation and a weakening of the U.S. dollar. Schenker also said the Latin American economic outlook for recycling was even more positive than the U.S. outlook, with stronger demand, a greater need for infrastructure and fewer overcapacity issues.

Paper and plastics concerns

BIR Paper Division President Reinhold Schmidt of Germany-based Recycling Karla Schmidt said hurdles to free trade are detrimental to recycling industry growth in the paper sector. Referring to his home market as an example of a “negative” political environment, Schmidt said the introduction of a circular economy law in 2012 has weakened Germany’s recycling structure. “We don’t expect any privileges, but we want at least to be able to work in fair competition with public powers,” he said.

Similarly, in her overview of European Recovered Paper Association (ERPA) activities, ERPA President Merja Helander of Finland-based Lassila & Tikanoja described the European Parliament’s 2013 rejection of the end-of-waste proposal for paper as a surprise and a disappointment.

“ERPA will definitely do its utmost to start the process again,” Helander said. “We must not give up but find new ways to solve the problems.” Ranjit Baxi of U.K.-based J&H Sales International gave a report noting a drop in Europe’s recovered fiber shipments to China in the first quarter of 2014. U.S. shipments to China were broadly unchanged for the quarter, whereas deliveries to China from other Asian countries more than doubled, Baxi said.

Baxi was honoured during the Paper Division session as recipient of this year’s Papyrus Award, which recognises paper recycling industry champions. Baxi also was appointed honorary president of the BIR Paper Division.

During the Plastics Committee Session, moderated by Chairman Surendra Borad of Belgium-based Gemini Corp., presenter Steve Wong of Hong Kong-based Fukutomi Co. Ltd, and president of the China Scrap Plastics Association, provided a Chinese market report for plastic scrap.

He told attendees about China’s new restriction on the import of black recycled pellets into China and said authorities also were considering a ban on the import of compacted expanded polystyrene (EPS). Nonetheless, Wong said demand for recycled pellets was strong and higher prices were being offered.

Most concerning at the present, said Wong, are the import duties and VAT importers have to pay as part of an effort to stop imports of low-value material.


The author is an editor with the Recycling Today Media Group. The BIR also contributed to this report.