Several statistical measures point to global steel production levels entering 2021 with positive momentum as national economies rebound from declines in activity caused by COVID-19. Correlating upward price pressure on ferrous scrap has been plain to see.

As new 2021 calendars were placed on walls and desks, vaccination programs got underway in nations around the world. Securities and commodities buyers and speculators largely took this as a positive signal, placing upward price pressure on nearly every kind of metal.

In the steel sector, the combination of a return of economic activity—even in places where COVID-19 was still part of the fabric of life—and government infrastructure spending have caused mill output to reach pre-COVID-19 levels in many parts of the world.

Figures from the Brussels-based World Steel Association (Worldsteel) for November 2020 steel production portray a world where the output of most nations had reached or surpassed prepandemic levels.

Among the nations that raced past their November 2019 steel output levels were China, Turkey, India and the combined European Union market region.

Another example of the steelmaking revival is in Latin America, where steel output in Brazil and Mexico (the region’s largest producers) have returned to prepandemic levels. Latin America also provides an example, along with China and India, of places where infrastructure spending has helped prompt the rebound.

For scrap recyclers, the impacts of a return to prepandemic steel output are clear to see. In the United States, November scrap price increases were followed by an $80 per ton average price rise. Recyclers in the U.S. pointed to slowly rising domestic demand and steady-to-surging export demand.

Adding more price pressure could be the return of Chinese steelmakers to the global ferrous scrap market. Five People’s Republic of China government agencies have issued a memo signing off on standards and procedures allowing a dozen grades of imported ferrous scrap to be relabeled from “waste” to “resource” and cleared at ports.

The returning acceptance of scrap imports ties into the growth of state-owned steelmakers adding electric arc furnace (EAF) steel capacity. As one example, Reuters reported Jan. 5 that a subsidiary of Baowu Steel—among China’s largest steelmakers—has started up a 2.8 million metric tons per year EAF mill in Anhui Province, China.

“Many feel it may be the top of the market because they are in disbelief, yet some fundamentals support even higher numbers,” veteran trader Nathan Fruchter of New York-based Idoru Trading told Recycling Today in mid-December 2020. “We are going into winter, where tonnage can sometimes tighten up and transport can be hampered by cold weather. This affects U.S. and EU ports, but Baltic and Black Sea supplies even more. Steel demand is also back with a vengeance, so at least those prices seem to be in sync with scrap.”

A steel sector industry veteran, quoted anonymously in an early January article posted to The Fabricator website, foresees a bubble destined to burst. “This is 2004 and 2008 combined,” says the observer. “Everyone is scrambling for steel, so they are doubling up on orders. Even OEMs (original equipment manufacturers) have customers that are placing multiple orders because they are hedging their bets on who can get them the end product faster. Once that end product ships to them, they will cancel their order with the other OEM, and then this will ripple back through the steel supply chain. Remember, scrap and iron ore were also extremely elevated during 2008. Look at what the analysts are projecting for 2021. It all looks very familiar.”

Fruchter is not convinced China’s presence will be sudden or will add to the first quarter 2021 price pressure. “China can’t really afford $500-plus -per-ton scrap,” he comments. Fruchter also says most overseas traders will “not be rushing” to embrace sales to China, and have reservations about exposing themselves to “wishy-washy quality specifications and the absurd penalties they impose.”    

There is no predicting how long a price spike will last, but the confluence of factors has some industry analysts predicting $1,000 per ton flat-rolled steel prices on the horizon. Scrap recyclers know well that where steel prices head, ferrous scrap values will follow, or vice versa.

Call2Recycle Canada Inc., a consumer battery stewardship organization connected to Atlanta-based Call2Recycle, has expanded its program to provide more options for battery recycling in the Canadian province of Saskatchewan.

According to an announcement on Call2Recycle’s website, the nonprofit environmental stewardship organization has been voluntarily collecting batteries in Saskatchewan since 1997. As of Jan. 1, Saskatchewan expanded the ability for residents to dispose of household batteries through a partnership with Call2Recycle Canada in order to meet regulatory requirements of the province’s Household Hazardous Waste Products Stewardship Regulations of 2019.

Through the province’s battery recycling program, single-use and rechargeable consumer batteries weighing less than 5 kilograms each, excluding lead-acid batteries, are acceptable in the program. Call2Recycle Canada is partnered with SARCAN Recycling, a recycling division of the Saskatchewan Association of Rehabilitation Centres, to collect and recycle batteries. SARCAN will offer 73 collection spots as part of Call2Recycle’s network of battery collection sites.

According to the government release as part of the new program, an environmental handling fee will be paid at the point of purchase effective Jan. 1. The fee rates range, depending on the size of the battery and chemistry type. Fees for AAA and AA batteries are 2 cents and 4 cents, respectively. Fees will be paid to Call2Recycle for the collection, transportation and recycling of batteries.

“We’re pleased and would like to congratulate the province on this move toward battery diversion from the waste stream,” says Kristen Romilly, Call2Recycle Canada’s director of Western Canada. “We look forward to increasing diversion away from the waste stream.”

International Paper (IP), Memphis, Tennessee, has entered into an agreement to sell its 90.38 percent ownership interest in Olmuksan International Paper to U.K.-based Mondi Group, a global paper and packaging firm, for about 66 million euros (about $81 million).

According to a news release on the transaction from IP, the Olmuksan business includes corrugated packaging facilities in Turkey with an approximate annual revenue of 150 million euros ($184 million).

IP issued a notice in October 2020 indicating it was exploring the sale of its stake in Olmuksan. That notice stated IP was evaluating “various alternatives for the packaging press business in Turkey” that included “sale to potential investors or sale in the relevant share market of Borsa İstanbul Financial advisors.”

A press release from Mondi Group says Olmuksan serves “a diverse customer base with high-quality sustainable packaging for food, beverage, agriculture and industrial applications.” For the 12 months ended Sept. 30, 2020, the company produced 256,000 metric tons of corrugated packaging.

The companies say the transaction is expected to close in the first half of 2021, subject to certain closing conditions and regulatory approvals.

Following the completion of the transaction, Mondi Group states that it plans to launch a mandatory tender offer to acquire the remaining 9.62 percent of the outstanding shares in the company held by minority shareholders. Mondi says its current Turkish footprint includes four corrugated packaging plants and a recycled containerboard paper mill, as well as three flexible packaging sites.

“We are excited by this unique opportunity to significantly strengthen our position in the fast-growing Turkish corrugated market and expand our offering to existing and new customers in the region,” says Andrew King, group CEO of Mondi.

IP reports that this action is in line with its strategy to serve markets from an advantaged position. The company says corrugated packaging remains a strategic business for IP in Europe, the Middle East and Africa. 

Case Construction Equipment (Case CE), Racine, Wisconsin, has named Terry Dolan as its new head of sales and marketing for Case CE in North America. Dolan is a longtime construction industry executive who previously worked in the Case organization in various strategic, sales, marketing and training roles. He has led major global brands in sales and marketing positions and will now lead Case commercial operations in North America.

“We are fortunate to have someone of Terry’s caliber and experience lead our North American sales and marketing team,” says Leandro Lecheta, head of construction - North America at CNH Industrial. “His customer-focused leadership and deep knowledge of the industry will build on the growth initiated by our most recent innovations in product and support.”

“I’m looking forward to rejoining the Case organization as I’ve always had a great passion for the construction industry—my home office is still filled with Case memorabilia, and I look forward to leading this iconic American brand into its next generation,” Dolan says. “The Case team’s focus on practical innovation and intuitive solutions, its gains in sustainability and alternative fuels, and the brand purpose of building communities all establish the foundation that will drive our accelerated growth.”

Dolan lives in Wisconsin and will be based out of the brand’s headquarters in Racine. He takes over for George Preocanin, who is retiring after more than 36 years in the CNH Industrial and Case organizations.

“George is highly respected throughout our entire organization, and while we will miss him, we also wish him the best as he enjoys his well-deserved retirement,” Lecheta adds.