Despite the challenges related to the pandemic, North America’s largest nonferrous scrap processors continued to buy, process and sell material throughout 2020. To arrive at the rankings for our lists of the largest nonferrous processors in North America, we asked processors to provide the pounds of nonferrous metals, excluding stainless steel, they processed in 2020.
Early in the second quarter of 2020, nonferrous scrap flows North America essentially stopped as a result of COVID-19, the disease that results from the novel coronavirus. Some scrap yards closed their retail scrap operations, and industrial generation in certain sectors, including automotive and aerospace, ceased for a time.
“Supply is very quiet; however, so is demand,” a red metals processor based in the Northeast told Recycling Today in April of last year. “Several yards, especially public-facing [ones], have opted to close down,” he said, referring to yards with retail buying operations.
One Midwest-based scrap processor said industrial generation had decreased 50 percent on the nonferrous side of his company’s business in April of last year. He said if mills saw orders strengthen in May of last year, demand of scrap would “outpace supply for a period of time.” He predicted a seller’s market, particularly for grades like aluminum cans.
“Short of being able to name your own price, mills may have to throw their established spreads and formulas out the door to secure scrap,” the Midwest-based processor said in April 2020.
His prediction proved true, though his timing was a bit off. Aluminum scrap dealers began to talk of having the upper hand in November of last year, which has continued through the first quarter.
As of the first quarter of 2021, processors say generation remains 15 to 20 percent softer than normal.
However, as generation rebounds, some of North America’s largest nonferrous scrap processors have announced new ventures or acquisitions that will provide U.S. outlets for some of the nonferrous metals they produce or help further refine this material so it can be used by U.S.-based smelters.
Vertical and horizontal leaps
After China introduced import restrictions for nonferrous metals in 2019, copper and aluminum scrap were oversupplied in North America. Some companies responded by adding North American smelting capacity.
Canada’s Giampaolo Group Inc. is among the companies that have done so. The company owns Brampton, Ontario-based Triple M Metal LP, which ranks fifth on our list of nonferrous processors with auto shredders, as well as Matalco Inc., which began melting aluminum scrap in Brampton in late 2005. Matalco produces 6000 series aluminum billets for the aluminum extrusion and forging manufacturing industries. It operates casting plants in Brampton; Canton and Lordstown, Ohio; Bluffton, Indiana; and Wisconsin Rapids, Wisconsin.
The Wisconsin plant, commissioned in late 2020, has a projected 115,000 tons of annual capacity, giving Matalco 505,000 tons of total annual capacity.
Triple M’s 27 locations in Canada, the U.S. and Mexico host four auto shredders, a wire chopping line and additional processing equipment. Matalco Vice President of Corporate Development Robert Roscetti told Recycling Today Senior Editor Brian Taylor that Triple M supplies nearly 40 percent of Matalco’s aluminum scrap needs.
More recently, Matalco has committed to building a 135,000-ton-per-year facility in Franklin, Kentucky, which is about 45 miles north of Nashville, Tennessee.
Aluminum, cobalt, copper, nickel and lithium are among the vital nonferrous metals because of their use in components of electric vehicles, battery energy storage, wind and solar technology and electricity transmission.
Sims, also on our shredder operators list, recently announced the purchase of certain commercial and operating assets of Alumisource Corp., an aluminum scrap processor and provider of furnace-ready products based in the Pittsburgh area.
Alistair Field, CEO and managing director of Sims, says the purchase will help the company grow its nonferrous retail volumes in North America. “Major aluminum customers in the United States continue to seek product that is suitable for direct charging. Alumisource meets these needs by providing ‘in-spec’ furnace-ready product in an automated and safe manner,” he says.
Alumisource provides raw material inputs to the aluminum industry in the form of custom shredded and blended aluminum scrap and supplies the steel industry with raw materials for artificial slag conditioners, deoxidation and desulphurization products.
The net increase in Sims’ North American metal division’s nonferrous retail sales volumes is forecast to be approximately 33,000 metric tons as a result of the purchase.
In the red metals sector, in mid-2020, Prime Materials Recovery (PMR) of Connecticut announced its partnership with Spanish company Cunext in a joint venture that will build a $26.3 million copper smelter in Shelby, North Carolina, called Ames Copper Group.
Bernard Schilberg, CEO of PMR, says China’s restrictions on copper scrap imports and the oversupply they have created in the U.S. market prompted the venture, as did demand for copper anodes in North America. “We will be able to compete globally with the new efficient technology we are implementing.”
Ames Copper Group will purchase birch/cliff, No. 2 copper chops with a minimum of 90 percent copper content and copper-bearing scrap and copper alloys with a minimum of 85 percent copper content. Schilberg says the smelter will consume 54,000 tons of scrap annually to produce 50,000 tons of 99.7 percent copper custom anodes.
While PMR will supply some of the scrap, he says, “a substantial amount will be purchased outside of PMR.”
These companies and the other nonferrous processors on our lists appear poised to benefit from the boost that the transition to the green economy will give to nonferrous metals.
As noted in “Reversal of fortunes," nonferrous metals should benefit from the green energy transition. Aluminum, cobalt, copper, nickel and lithium are among the vital nonferrous metals because of their use in components of electric vehicles (EVs), battery energy storage, wind and solar technology and electricity transmission.
Julian Kettle, senior vice president and vice chair of metals and mining at U.K.-based Wood Mackenzie, says aluminum demand will increase by roughly one-third by 2040 as a result of the green energy transition.
In a seven-chapter research report also from Wood Mackenzie, Huang Miaoru, Gavin Thompson and Zhou Yanting include a section forecasting how much copper and aluminum it will take to upgrade China’s EV output, bolster its EV charging network and engage in other wire- and cable-intensive changeovers.
They write, “China needs to expand its domestic ultra-high-voltage transmission networks. Copper is China’s Achilles’ heel. Essential for electricity transmission, wiring and wind turbines, the country’s domestic and overseas equity production of mined copper is just 16 percent of what it needs, leaving it net short to the tune of 7.5 million metric tons per year at current demand levels.”
China’s government recently allowed high-purity copper and other nonferrous scrap to be imported into the country without restrictions, reopening a market that had been cut off for about a year.
Rising demand for aluminum, copper and other nonferrous metals related to the green transition should boost nonferrous scrap demand, as well, and the processors on our list should benefit from that growing demand.