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Markets for zinc, lead and tin are characterized by their evenness.

Curt Harler September 12, 2013

Boring may sound bad, but boring can be good. Think about good old boring Charlie Brown from the comics. He may be bland, but everyone likes Charlie Brown, almost as much as his glowing dog Snoopy.

The world of zinc, lead and tin would fit right in with Charlie Brown. Good old zinc, lead and tin. Except for when something akin to Lucy snatching the football away, which happened earlier this summer in the lead market, base metals are generally characterized by their consistency. (See sidebar, “Battery Producer Takes a Hit,” below )


Staying Steady

The markets for zinc, lead and tin tend to be boring and steady, according to most traders. The materials avoid many of the extreme peaks and valleys that are seen in commodities like aluminum or nickel-based materials. Right now, for example, stainless in many parts of the country is in a valley well below where it normally sits. That kind of price displacement rarely happens in these base metals, sources say.

“Nobody is not answering the phone when I call about zinc, lead or tin,” says Jeff Bentley, manager of nonferrous materials at SA Recycling’s corporate headquarters in Orange, Calif.

Bentley attributes the steadiness to the simple fact not enough zinc, lead or tin is moving through the market to accumulate a glut of material.

“If zinc is selling at 80 percent of its intrinsic value today, it was probably selling for 80 percent of its value last week and will be selling for 80 percent of its intrinsic value next week,” he says.

Quantities are not like what recyclers see with MLC (mixed low copper) or bright copper wire scrap. “But we do make sales every month,” Bentley says.

“Lead recycling is one of the oldest industries in the world and has one of the highest product recovery rates (in excess of 95 percent),” says Ed Green, vice president of battery operations for Toxco Inc.’s Baltimore and Lancaster, Ohio, locations. Green is responsible for day-to-day logistics and processing operations.

Toxco’s Trail, British Columbia, location recycles lithium batteries, while its Lancaster plant processes large format lead-acid batteries, nickel-metal hydride batteries used in hybrid and electric vehicles and nickel-cadmium batteries. The company’s Baltimore location is a universal waste handling facility. Kinsbursky Bros., Toxco’s parent company, owns and operates a battery recycling operation in Anaheim, Calif.

“While we don’t have the comparative data of recovering lead from primary sources versus secondary sources (i.e., batteries), we presume that the cost benefit in all areas (electricity, transportation, carbon expenditures and more) is worthwhile and beneficial, especially when considering the limited primary lead activity in the U.S.,” Green says.


Leaden Market
Recycled lead accounts for the vast majority—more than 99 percent—of new battery production, according to Janet Karch, director of recycling for Dallas-based Interstate Batteries. Interstate has a closed-loop process and actually recycles more batteries than the company sells, she says.

Karch says she sees the demand outlook for recycled lead remaining strong. “We anticipate the trends that have been seen over the past few years will continue,” she says. “Globally, there will be an increased demand for recycled lead.”

All of Interstate Batteries’ recycled spent SLI (starting-lighting-ignition), or lead-acid, batteries—about 25 million last year—are processed by permitted North American smelters, Karch says.

Battery Producer Takes a Hit

In a business that is notable for its even-tempered markets, the announcement in mid-June by Exide Technologies, Milton, Ga., that it was seeking bankruptcy protection put a cloud over the lead business. Exide is a major producer of lead-acid batteries.

Only the company’s U.S. operations come under the bankruptcy filing. Exide cited higher spent-battery costs and lead-related price increases as putting pressure on the company’s margins.

The real kick came in 2010 when Wal-Mart Stores Inc. moved its battery contract from Exide to rival Johnson Controls, headquartered in Milwaukee, Wis. The move cost Exide about $160 million in annual revenue.

Exide says it is not going out of business. Its Chapter 11 filing does not change the work schedules of its plants or offices, the company says, adding that it intends to continue to fulfill commitments to clients and will continue looking to write new business contracts or renew current contracts as well.

Several operations are permitted to recycle lead-acid batteries, which contain lead and sulfuric acid. (Perhaps the most common lead-acid battery is the one that is used to start your car.) Toxco operates a permitted lead-acid battery operation in Lancaster that processes batteries in one of two ways: Batteries are manually demanufactured into their base components—lead battery plates, plastic and steel. The battery electrolyte is treated on site in a wastewater treatment unit. These components are then sent off site to a Toxco-approved secondary processor, where they are recycled. The second method involves an automated system through which whole batteries are mechanically processed and the materials separated into their base components. In this system, the lead is segregated further into basic components of lead grid (metallic portion) and lead paste (oxides). The plastic and separator materials also are recovered. The battery electrolyte is recovered and treated on site.

Since Toxco is not a lead smelter, all lead materials are ultimately sent to an Toxco-approved secondary lead smelter for recovery.

While California may have the strictest regulations about lead, several other states have mandates to recycle lead-acid batteries, including Ohio. An Ohio law became effective April 25, 2008, prohibiting the disposal of lead-acid batteries in solid or hazardous waste landfills. The Ohio law and those in other states typically require wholesalers and retailers of lead-acid batteries to take back old batteries for recycling when a consumer purchases a new one. Batteries that are covered by the law include those used in vehicles, motorcycles, wheelchairs and boats.

For the most part, such laws target the automotive, or SLI, batteries and were established to capture used batteries at the point of purchase from retail locations.

SA Recycling’s Bentley says his company gets two types of lead: scrap and lead-acid batteries. “In California there is an extra layer of regulatory oversight that makes it difficult to do business,” he says. As a result, SA deals only with companies that the state’s Department of Toxic Substances Control has approved.

For that reason, too, SA typically avoids the export market.

“While we can and do manage these smaller automotive type batteries, our specialty lies with the larger industrial-type lead-acid batteries,” Green says of Toxco.

Fortunately for recyclers, most battery sales, even those involving large industrial batteries, have a component to ensure the battery being replaced is properly managed at the end of life, he says.

Green points to the company’s diverse customer base. “We have business relationships that span the gap from very small producers or generators all the way to large telecom companies as well as OEMs,” he says of Toxco.

“Often our companies are used specifically because the regulations require the proper handling of batteries, and, as all of our facilities are licensed, our customers have the confidence that their material will be properly managed,” Green says.

With 60 years of recycling spent batteries under its belt, Interstate finds laws mandating the process actually supports the company in many ways. “We take responsibility to our stakeholders seriously and have implemented a Green Standard program to ensure that we not only meet the regulations but exceed them where possible,” Karch says.

Interstate Batteries’ Green Standard program focuses on the quality of the company’s collection and recycling procedures, ensuring safe and secure handling of battery cores to minimize environmental and safety risks, the company says.

“We’re seeing no more than normal,” says Randy Katz of City Scrap and Salvage, Akron, Ohio, of the volume of lead the company receives for recycling. Most of the lead City Scrap processes is from lead-acid batteries, though the company also gets lead from weight or barbell sets and some soft lead.

Lead prices seem steady at the moment, sources say. Typically, lead sells for something in the area of 15 cents per pound.

“There’s nothing in the way of change that I have noticed,” Katz says.

While she looks to those who make a living forecasting the future to provide price outlooks, Karch says Interstate Batteries does expect lead prices to remain steady or even increase over the next year.

Green says it is difficult to pinpoint the long-term (12 to 18 months) outlook for lead. “We hope that the market will stay stable,” he says, “but we just don't know, as our crystal ball is broken.”

He adds that while competitive conditions are always present in the industry, the market for secondary lead appears to be in equilibrium, with supply and demand keeping pace.

“KBI/Toxco is a battery-centric business,” Green says. “We are continuously in the market to acquire batteries for our operations.”

Because the available supply of end-of-life batteries can be seasonably affected by extreme winters and summers that have a deleterious effect on batteries, more scrap could be available after a particularly harsh winter or summer, Green explains.

While lead tends to flow through recycling operations at a slow but steady pace, the market for tin and zinc in most areas is barely a trickle.


Tin Men

The market for tin, too, is slow. Block tin scrap is a popular item, as is appliance tin. Much appliance tin comes from spent air conditioning units. While some southern operations will see tin roofs from barns and sheds, this material often is regional.

“The only tin roofs that I’ve seen are at Friendly’s Ice Cream,” quips Katz. However, if he does receive tin of this type, Katz says he would simply run the material through his shredder as sheet iron.

Into summer, the market for tin was weak. “It is slow all over the country,” says Benny Aslam, nonferrous buyer with American Recycling, Fort Worth, Texas.

Although the company shreds a fair amount of tin, its local market has been “OK to slow,” Aslam says. Most of the tin American Recycling sees comes from the public, which brings about 8 cents per pound.

Most new tin scrap—turnings and other material generated in the manufacturing process—never leaves the manufacturer; it is simply reclaimed and reused in the manufacturing process, sources say.

On the West Coast, recycling yards rarely see new tin scrap. However, the electronics industry does generate a fair amount of tin, and the Los Angeles area is home to a tin smelter.

Those who purchase appliance tin usually offer something in the area of $150 to $155 per ton for it at the gate, sources say. Clean tin might fetch another $20 per ton. On a per-pound basis, that figures to 7 cents or 8 cents per pound—hardly worth anyone’s time to collect unless in quantity.

On the appliance side, tin has to be free of Freon (or have the Freon removed on site) before it can be processed.


Minimal Zinc
“The price is so minimal on zinc and tin that you don’t even see it come in,” Katz says of the Ohio market.

Zinc die-cast will go through his shredder, he says. However, so little of it comes into the yard that City Scrap does not even keep track of the volume.

The story is a bit different on the West Coast, where Bentley enjoys a good export market, especially to China. He says it is easier and less expensive to ship the material to China rather than to ship the material to consumers on the East Coast.

“The West Coast has been taking advantage of preferential freight rates [to China] for at least 10 years now,” he adds.

Anywhere there is die-cast production with alloys, there will be zinc scrap. Some comes from the aerospace molding market, but most of the full spectrum of zinc material that comes into the typical operation will be postconsumer.

While boring and slow, at least these base metals are largely predicable.

 

The author is a freelance writer based in the Cleveland area. He can be contacted at curt@curtharler.com.

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