Portland, Oregon-based Schnitzer Steel Industries has reported $154 million in net income in its 2018 fiscal year, which concluded Aug. 31. That figure is 258 percent higher than the $43 million in net income the scrap recycling and steelmaking company earned in its 2017 fiscal year.

In its fiscal 2018 fourth quarter, Schnitzer’s Auto and Metals Recycling (AMR) business unit generated operating income of $34 million, or $33 per ferrous ton, which the company says is a 41 percent increase in operating income from the prior year’s fourth quarter.

“AMR’s improved operating income year-over-year was driven by expanded metal spreads, higher ferrous and nonferrous sales volumes of 19 percent and 11 percent, respectively, higher average ferrous and nonferrous selling prices of 23 percent and 8 percent, respectively, and a continued focus on productivity and commercial initiatives, including measures to increase supply flows,” states the firm.

Cascade Steel and Scrap (CSS), SSI’s steelmaking unit, generated fourth quarter operating income of $14 million, a 70 percent increase compared with the prior year’s fourth quarter operating income of $8 million. The company cites “an increase in finished steel average net selling prices of 31 percent, which significantly outpaced the increase in the cost of steelmaking raw materials and higher export sales volumes,” for the improved profitability.

“We delivered our best fourth quarter performance since fiscal 2011, capping a year which reflected our strongest full year financial and operating performance in seven years,” comments said Tamara Lundgren, SSI’s president and CEO. “For the full year, AMR achieved operating income per ferrous ton of $46, underpinned by volume increases and the resulting operating leverage generated from ongoing productivity initiatives.”

On the steelmaking side, “CSS also delivered excellent results, driven by higher prices and demand, metal spread expansion, low levels of imports, and benefits from productivity and efficiency investments,” says Lundgren.

“The combination of our strong profitability and effective working capital management enabled us to generate operating cash flow of $160 million in fiscal 2018, which allowed us to increase our investments in growth capex and return capital to our shareholders through both our dividend and share repurchases, while reducing our debt to its lowest level in the past eight years,” adds Lundgren.

The company is positioned to further upgrade its operations, says the CEO. “Looking forward, our strong balance sheet provides us with the ability to continue our investments in advanced processing technologies, environmental stewardship and transactional market opportunities, while continuing to return capital to our shareholders,” she comments.

The company says in fiscal 2018 the CSS operating performance “benefited from a higher [steel mill] utilization rate compared with the prior fiscal year and ongoing productivity improvements from the integration of our steel manufacturing and Oregon metal recycling operations, which took place in the fourth quarter of fiscal 2017.”

Brookhaven, New York-based Hudson Baylor Brookhaven, also known as Green Stream Recycling, announced plans to temporarily suspend operations at its Long Island single-stream recycling facility indefinitely, according to a Hudson Baylor Brookhaven statement. 

Initially, the company planned to suspend operations Oct. 22, but it has extended operations until Oct. 29, per the town of Brookhaven’s request. According to the statement, the company needs to suspend operations “due to the mass of materials delivered to the facility no longer having any useful, physical or chemical properties.” 

“Essentially, it’s market conditions,” says Will Flower, a spokesperson for Green Stream Recycling. “And the other is an unfavorable agreement that needs to be reworked. So, the [current] contract was just not going to make Green Stream a viable entity.”

According to the company, Green Stream Recycling was the first company on Long Island to introduce single-stream recycling in January 2014. However, the company adds that the recent state of recycling in 2018 has had a negative impact on Hudson Baylor Brookhaven as it has other recyclers across the U.S.

In addition, a company statement adds that “the lack of markets for recyclables is well beyond the control of the town of Brookhaven or Hudson Baylor Brookhaven. [The company] has attempted in good faith to coordinate a path forward that has the least detrimental impact to the town and its residents. Municipalities across the United States have been working throughout the past year to reshape recycling programs and reform existing agreements with recycling service providers to address the new market realities and are continuing to do so to this date.” 

With Hudson Baylor Brookhaven suspending operations, Flower says the town has a secondary bid going out to provide recycling services. Flower adds that the company hopes to relaunch Green Stream Recycling in the future.

There are many questions today on what can and can’t be recycled—particularly with items like postconsumer cups. 

During Recycling Today’s Paper & Plastics Recycling Conference, Paper Stock Industries (PSI), the national chapter of the Institute of Scrap Recycling Industries (ISRI), gathered brand owners and recycling industry leaders to participate in a panel discussion on some of the points and counterpoints to postconsumer cup recycling. Based on the discussion, both sides expressed a desire to recycle postconsumer materials and a concern for finding end markets for these more contaminated commodities.

“How do we keep customers happy but also don’t cause problems for recycling or provide you with materials you don’t want?” asked Amy Duquette, sustainability project manager at HAVI / McDonald’s, during the panel discussion. “We’re looking at the whole thing—how [postconsumer cups] go through MRFs, end markets (and do end markets exist)? This has to make money for people—recycling is not a waste service.” 

Bill Moore, moderator of the session and president of Moore & Associates, Atlanta, said residential recycling is at a bit of a crossroads on this topic. 

“Even before China stopped accepting mixed paper, they had a limitation on anything that touched the mouth,” he said, adding that China could have clamped down on this issue a while ago. “They waited until the current times to put limitations on mixed paper.” 

With the current state of recycling, the following question emerges: Where should the industry stand on recycling postconsumer products like cups from McDonald’s or Starbucks? 

The following is some of the dialogue between brand owners and recycling industry professionals from the session:  

Discuss what you see as collection problems with postconsumer materials. 

Rebecca Zimmer, global director of environment, Starbucks: We understand that contamination is a concern across all recyclables, and liquids are a concern with cups. We do have challenges on in-store collection on contamination, and that’s because it’s difficult to reinforce behaviors. You have to dump liquids before you recycle. Seattle, D.C., Vancouver—you can recycle cups. However, when you look at options for cups, [they] can go to landfill, recycling or composting. We believe cups have high-value fiber that’s worth recovering in the stream. When residential access opens up to cups, what we’ve heard anecdotally is customers and consumers are doing a better job cleaning out recycled content into the bin.

Amy Duquette, sustainability project manager, HAVI/McDonald’s: A couple of thoughts on this. When we look at our packaging suite, our paper cups hold coffee and tea, and in our cold cups we have fountain beverages. Those [cups] are less concerning than a milkshake or a Big Mac clamshell. From that perspective, no one will want a paper cup filled with liquid, but because the majority of paper cups go home, then it’s just an issue like any other. Are people emptying yogurt tubs before recycling? Are they emptying cups? It’s an issue similar to any other household item you have. Those items have contamination issues, as well. I think the thing to look at is why do the end markets want these items? Some end markets are interested in these cups. Studies show contamination on foodservice packaging is similar to any other item, and it comes down to educating consumers on how to recycle properly. 

Where do you stand on postconsumer cup recycling? 

Linda Leone, vice president northeast region, WestRock: I think a couple of things with regards to WestRock—we’re a paper and packaging company. We also have 26 paper mills and recycling plants that use recycled commodities. The majority of mills use a [certain] amount of recycling, if not 100 percent, so we have to look at this as total picture on supply. We’re still doing some testing to look for our corrugated mills that can consume it. The challenges we had at WestRock were really looking at the cup stock from a standpoint of it does have high fiber yield. It’s good strength for mixed paper. But we also have to make sure mills have cleaning abilities to break down polymers to get good fibers out of the cups. There’s not an end market everywhere for the commodity. 

So, [the other thing we’re trying to figure out is] understanding how collection infrastructure will work. Not all mills everywhere even run recycled or mixed paper, which we in our opinion feel that’s the best value for that.

Kerry Getter, CEO, Balcones Resources: At McDonald’s, I order a No. 3 with a Diet Coke, and at Starbucks, I order a venti coffee with a blueberry scone and an orange juice. And as I wander around some of those stores, when I see some recycling initiative in place, I’ll poke through the recycling container to see what’s in there, and it’s not a pretty sight. We have the responsibility—and I have the responsibility—of making money for our shareholders. 

And really, this entire subject is about the cost of recovery for us and what it costs. And what kind of return on investment we can get for the recovery system that we put in place, not only the recovery side of things but we have to have a mill partner who can use this. And for those of you who sell waste paper, you know what I’m talking about. There need to be multiple end users and it is about the cost of recovery. 

For us, once you accept any items—forget about cups, it could be single-use plastic bags—we have to make money in that initiative day in and day out, regardless of market conditions. My challenge to both McDonald’s and Starbucks, and it seems to me you’re aware of this, is to try to create economic value for your products and understanding what that is. There needs to be in my view a significant argument that allows us to make money. We understand what you all are dealing with. I want you to understand what we’re dealing with. We gotta sell our product day in and day out. If all those issues can be addressed in a way that clearly leads us to a path for a pay day, then we’re happy to pursue it. 

Mark Badger, president and CEO, Canada Fibers: We come from stance of a [material recovery facility] operator. I can only tell you in our experiences that it starts with the anatomy of a cup. The cup we see in Canada is saturated with ink. You have three materials in a cup. We get a lot of them in our MRFs. One of two bad things happen when they come into the plant, and it doesn’t have to be this way. When they come in, if optical sorters are set not so sensitive and [the cups] read as paper and go to bales, customers who consume it don’t really like the fact that the bales have hybrid material in it. It goes to people who view it as contamination and are drowning in contamination because of the epidemic we have in North America. Second thing, which is even worse to me, is if optical sorters are set to real sensitive and they get confused because of the three kinds of material, and [the cups] end up in residue—they end up in the dump. When they go to the dump, it’s a big deal. 

What the heck should we do? I think we do exactly like Amy and Rebecca advocated for—we collaborate. Float an idea, and it begins with the different design of a cup. It’s one idea, although it might not be the optimal idea. 

ND Paper, a wholly-owned subsidiary of Nine Dragons Paper (Holdings) Limited, completed its acquisition of the Old Town, Maine, kraft pulp mill from OTM Holdings LLC, a subsidiary of CVG Inc. on Oct. 19. 

Under the terms of the asset purchase agreement, ND Paper acquired the bleached kraft pulp mill, plus approximately 100 acres of real property, for an undisclosed sum, payable in cash.

Prior to its idling in the fourth quarter of 2015, the Old Town Mill manufactured and distributed approximately 155,000 air dried metric tons annually of bleached hardwood kraft pulp, according to an ND Paper news release. After a series of phased capital investments, ND Paper expects the Old Town Mill will restart in the first quarter of 2019 and ultimately produce 275,000 air dried metric tons annually of unbleached kraft pulp.

ND Paper also acquired Catalyst Paper’s Rumford, Maine, and Biron, Wisconsin, paper mills earlier this year in June.