Apart from the automotive sector, which has an oversupply of finished products, according to a plastics reprocessor based in the East South Central region, generation of plastic scrap appears to be relatively steady as of mid-December.

“It’s about where you’d expect it to be this time of year,” a reprocesor based in the South Atlantic region says, adding that some slowing has occurred as one would expect with the start of the winter season.

Regarding demand, a broker based in the Northeast says it appear to be “pretty level going into the end of the year.” He adds, “That is not to say that there are some outliers with each grade that have increased demand. For example, we are selling more HDPE N (high-density polyethylene natural) and PET (polyethylene terephthalate) to some specific end users.”

The reprocessor in the South Atlantic region characterizes domestic demand for the recycled flake and pellets his company produces as good, adding that it may be “a little better than normal.”

His company largely deals in HDPE, low-density polyethylene (LDPE) and polypropylene (PP). “This time of year, demand is driven a lot by the pipe market,” he says of recycled HDPE in particular. “As long as it’s a mild winter, demand is pretty good.”

The reprocessor continues, “Demand for recycled plastics is up slightly over last year and much better than in 2014.”

“Demand for recycled plastics is up slightly over last year and much better than in 2014.” – a reprocessor based in the South Atlantic region

He describes 2017 as the best of the last three years in terms of his company’s profitability. The reprocessor credits that in part to the decrease in pricing for available feedstock and to pricing stability for his company’s finished material.

“I really think that pricing for both PE and PP will remain steady, but many companies seem to be holding off purchases,” the reprocessor in the East South Central region says. “We have moved some loads via spot sales at a reduced price, and people are definitely taking advantage of that, which leaves me to believe there is pent-up demand.”

The broker says demand from Southeast Asia for certain grades has picked up. “We are seeing some interest with MRP (mixed rigid plastics), rigid PVC (polyvinyl chloride) and EPS (expanded polystyrene) exports,” he says. “The activity has risen a little over the last month or two as everyone is trying to get their orders in before the end of the year and on the water.”

However, when it comes to shipping plastic scrap to China, the broker says, “I would not be taking a chance to ship things into China right now in the current trade climate.”

When it comes to transporting material, new electronic logging requirements are a source of concern for the reprocessor based in the East South Central region. She says trips of less than 700 miles that otherwise could have been made in one day could now take two days, affecting material flow and cost. “It’s already a hard enough business environment without these onerous requirements.”

As 2017 came to an end, the recovered paper stock industry attempted to prepare for changes expected, and unexpected, in 2018.

For one, the Institute of Scrap Recycling Industries (ISRI), Washington, issued an alert to its members dated Dec. 11, 2017, updating them about its recent meetings in Beijing with Chinese and U.S. government officials and its industry association counterparts. The association also offered guidance to its members regarding implementation of China’s new import rules.

ISRI suggests that its members be vigilant when loading containers to avoid including dirt, wood, concrete or other materials or even recyclables that do not belong in that particular load. The association also advises including more photos and thoroughly documenting the condition and contents of shipments before export. It also tells its members to expect rejections.

Additionally, ISRI encourages its members to keep records of their experiences, including reasons given for rejections, and to share this data.

In response to ISRI’s meeting with Chinese government officials, Simon Ellin, CEO of the U.K.-based Recycling Association, says, like ISRI, the European association is reminding its members to keep material clean, take more photos and be prepared for rejections.

Ellin refers to the situation as “potential chaos” in a December news release.

“The discussions ISRI has had with the Chinese government highlight a lot of concerns we have had that the ban and greater restrictions on imports is being implemented too quickly,” Ellin says. “Clearly, as much as we in the U.K., U.S. and elsewhere do not have time to adapt, this is also the case with the Chinese agencies at the other end. This suggests there could be chaos until everyone is able to adapt or ideally a much longer time period is given for us to prepare.”

A trader based on the U.S. West Coast warns that just because China is buying recovered fiber, it does not mean rejections will ease up. As ISRI anticipates, rejections will become more frequent.

“What are these guys going to do when they open the containers and see a plastic bottle in the back of a container? [The Chinese inspector] can close the doors, get the container out of here, take the other 20 containers and move them somewhere else. It’s a six-figure mess, very easily,” the trader says. “There still is going to be sizable risk shipping to China.”

Compared with November, Chinese consumers paid more in December for sorted residential paper and news (SRPN), sorted office paper (SOP) and old corrugated containers (OCC), with the exception of a drop of $5 per ton FAS (free alongside ship, meaning the seller must deliver goods to a named port alongside a vessel the buyer designates) in New York for OCC, according to the Dec. 5 PPW Yellow Sheet from Boston-based research firm RISI. Mixed paper prices to China dropped across the board in a range of $2 per ton to $15 per ton.

Domestic pricing for recovered paper was mostly flat, except for movements in the West: SOP increased $5 per ton in Los Angeles; SRPN hiked $10 per ton in the Southwest, Los Angeles and San Francisco and $5 per ton in the Pacific Northwest; OCC declined $10 per ton in the Southwest; and mixed paper increased $10 per ton in the Southwest and dropped $5 per ton in Los Angeles, San Francisco and the Pacific Northwest.

At a U.S. average price of $29.45 per ton, mixed paper sold for less than half of what it sold for one year prior, when it was $77 per ton.

“All I’ve heard from other people is that they expect the market [in 2018] to be hotter than hell.” – a trader based on the West Coast

OCC wrapped up the year at $104.72 per ton, having dipped below $100 per ton just once in 2017, when it sold for $96.67 in October.

Looking ahead, a recycler based in Midwest says, “We expect it to be outstanding,” regarding the start of 2018.

The trader based on the West Coast also has a positive outlook. “All I’ve heard from other people is that they expect the market [in 2018] to be hotter than hell,” he says.

For a free trial of RISI’s PPW Yellow Sheet pricing, please visit www.risi.com/rt.

Scrap processors and shippers who benefit from loftier prices received an early holiday present when the early December 2017 scrap buying period led to per-ton price increases in the $20-to-$30 range.

One recycler in the Great Lakes region says of negotiations between processors and mill buyers in early December, “Initial talks [were] in the plus $10-to-$20 range.” By the time American Metal Market (AMM) had calculated its Midwest indices Dec. 11, however, “The market ended up being up $20 to $30 per ton—up $20 on primes and up $30 on obsoletes.”

With the same recycler concluding that “the market shaped up nicely for December,” 2017 came to a close with only three months out of 12 where ferrous scrap prices lost more than $5 per ton on average. (Those months being February and April, which entailed relatively modest drops, and October, when prices plunged $30 to $40.)

On the supply side, scrap processors had more good things than bad to say about the early winter and the situation heading into the new calendar year.

“Things always slow down this time of year, but we are fairly busy,” a processor in the Upper Midwest says in mid-December. “The price bump helps,” he adds, regarding the ferrous scrap price increase in early December.

A scrap processor in the prairie states comments in mid-December: “Flow is good, and we have had a really busy second half of the year.” He expresses concern, however, about the falling price of copper, which could affect flows of all material going forward.

“With this devaluation in the [nonferrous] markets recently, we’ll see; but, we still seem to be buying some material.”

Futures-traded copper on the COMEX exchange fell to as low as $2.94 per pound for March delivery in early December, reportedly based on an abundance of mined copper and concerns about China’s economy.

Overall on the ferrous side, recyclers express optimism as they head toward the new year. Pleased with how December went, the Great Lakes region processor adds, “January is looking good as well. The early forecast, I would say, is up another $10 to $20 per ton.”

Demand seems healthy, though seasonal factors could come into play, the recycler in the Upper Midwest says. “Our foundries around here seem to be busier than they were a year ago, for sure, but not crazy busy,” he comments. “Most are shutting down the whole week of Christmas.”

Nonetheless, regarding January, he adds, “Domestic markets seem to be good, and hopefully it carries over into the new year.”

Export demand also remained healthy in late 2017, with U.S. Census Bureau data showing that even when Turkish mills reduce their purchases, emerging market buyers from Southeast Asia and the Indian subcontinent step in. (For more on these emerging markets, see the feature article “Expecting big things” in the Scrap Metals Supplement of this issue.)

The 2017 ferrous price scorecard totaled six months where scrap gained value, just three where it lost value and another three with an essentially flat market (major grades gaining or losing $5 per ton or less in price).

The year featured some regional pricing disparities, however, as well as rising and falling gaps in the value of obsolete grades versus prompt or prime grades. Heading into the new year, the Great Lakes processor predicts, “We may see the gap close on primes and obsoletes.”

The November buying period featured one of the wide gaps in grade value in 2017, with prime grades fetching some $60 per ton more than shredded scrap and nearly $80 per ton more than No. 1 heavy melting steel (HMS) that month, according to AMM’s Midwest indices.

Figures collected and averaged by the Raw Material Data Aggregation Service (RMDAS) of Pittsburgh-based MSA Inc. show that mills in the RMDAS North Midwest region paid as much as $17 per ton less for scrap compared with their counterparts in other regions in November 2017.

Scrap prices in the North Midwest region typically lag those in the RMDAS North Central/East region but usually are comparable with those in the RMDAS South region. In May 2017, mills in the two regions paid within $4 per ton more on average for all three grades RMDAS tracks: prompt scrap, shredded scrap and No. 1 HMS.

“Things always slow down this time of year, but we are fairly busy. The price bump helps.” – an Upper Midwest region recycler

In November, buyers in the South were able to get No. 1 HMS for just $3 per ton more on average compared with their counterparts in the North Midwest. However, southern mills paid $9 more per ton for prompt scrap and $17 per ton more for shredded scrap.

Such regional disparities in the steel rebar sector are cited among the reasons why Charlotte, North Carolina-based Nucor Corp. is investing in smaller, regional scrap-fed micromills to produce rebar. (See “Nucor to build micromill in Missouri” for more information.)

Additional RMDAS (Raw Material Data Aggregation Service) pricing from Pittsburgh-based Management Science Associates (MSA) is available on the Recycling Today website at www.RecyclingToday.com/RMDAS.

The American Metal Market (AMM) Midwest Ferrous Scrap Index is calculated based on transaction data received that are then tonnage-weighted and normalized to produce a final index value. The AMM Scrap Index includes material that will be delivered within 30 days to the mill. Spot business included after the 10th of the month will not be included. The AMM Ferrous Scrap Export Indices are calculated based on transaction data received that are then tonnage-weighted and normalized to produce a final index value. The detailed methodology is available at www.amm.com/pricing/methodology. *FOB New York, in metric tons; **FOB Los Angeles, in metric tons.

For some, the start of a new year brings with it resolutions focused on self-improvement that range from getting in shape to improving work-life balance. As an industry, the waste and recycling sector has resolved for some time to improve the safety of its operations. According to statistics recently released by the Bureau of Labor Statistics (BLS), the industry appears to have followed through on that resolution in 2016.

According to data from the Occupational Safety and Health Administration (OSHA), fatalities in the public and private waste and recycling industry declined from 50 in 2015 to 42 in 2016. This was despite a 7 percent increase in overall workplace fatalities. According to the BLS’ Census of 2016 Fatal Occupational Injuries report, 5,190 workplace fatalities occurred in 2016, with the fatal injury rate increasing from 3.4 per 100,000 full-time equivalent workers in 2015 to 3.6 in 2016.

Transportation safety has been an issue championed by the National Waste & Recycling Association (NWRA) for some time, and with good reason. Work injuries involving transportation incidents remained the most common fatal event overall in 2016, accounting for 40 percent (2,083) of overall fatalities. OSHA says 1 out of 4 fatal injuries arose from transportation incidents.

For the last three years, the NWRA’s work in this area has focused on “Slow Down to Get Around” legislation, which is now the law in 16 states and under consideration in several more. These laws require motorists to slow down when waste and recycling collection vehicles are stopped and workers are getting on and off, just as motorists are required to slow down in construction work zones, stop for school buses and pull over for emergency vehicles.

"While the industry made modest safety improvements in 2016, it’s incumbent on all waste and recycling industry managers and workers to continue that progress in the years ahead.”

The NWRA notes that fatalities declined at landfills and material recovery facilities (MRFs) in 2016, according to the BLS report, while they remained the same in the waste collection industry. Refuse and recyclables collection fatalities also declined to 31, as did the fatal work injury rate (34.1 per 100,000 full-time equivalent workers); however, this occupation retained its position at the fifth most dangerous industry.

Workers in the waste and recycling sector are confronted by a number of potential hazards every day at work, from conditions that could lead to falls, slips and trips to equipment that could take a limb or a life if not powered down correctly prior to servicing. Everyone plays a role in ensuring his or her colleagues go home without incident each day.

While the waste and recycling industry made modest safety improvements in 2016, it’s incumbent on all waste and recycling industry managers and workers to continue that progress in the years ahead. It’s a resolution that is worth making time and again.