California’s Port of Long Beach (POLB) is one of the world’s premier seaports, a gateway for trans-Pacific trade and a trailblazer in goods movement and environmental stewardship. With 175 shipping lines connecting Long Beach to 217 seaports, the POLB handles $180 billion in trade annually. The POLB is a major economic engine for the Southern California region, supporting 1 in 8 jobs in Long Beach, 300,000 jobs in Southern California and 1.4 million jobs nationwide.

As the second-busiest seaport in North America, POLB moved 7.2 million TEUs (20-foot equivalent units) in 2015 and exported more than 380,000 TEUs of recovered paper and scrap plastic in 2015, which was 14 percent of our total laden container exports. We would like to thank the recycling industry for your confidence in our port and for your business.

Containerized cargo makes up about 75 percent of total volume, but the POLB is an omniport, moving all types of cargo. In addition to six container terminals, the port complex houses eight dry bulk terminals, six liquid bulk terminals, five break bulk terminals and two roll-on/roll-off facilities.

Port improvements

As cargo volume grows and ship size escalates, we continue to ensure efficient movement of your cargo. We are investing $4 billion this decade to improve our infrastructure—building a new bridge, creating a fully automated, zero-emissions megaterminal and increasing on-dock rail capacity. This aggressive capital spending plan is one of the many reasons we have been named “Best American Seaport” by Asia Cargo News 18 times in the past 21 years.

Where is this $4 billion being spent? To start, POLB is building the new $1.5 billion Gerald Desmond Bridge, which will replace the current bridge. It will be 205 feet above the water, 50 feet higher than the current bridge. This will allow for megasized ships to travel underneath and reach our north harbor. It will have additional lanes in each direction, including emergency and bike lanes. The bridge is important commercially because about 15 percent of all U.S. imports travel on it. The new bridge will be completed in 2018 and will be an iconic structure for the city of Long Beach. With its towers, it will be 500 feet tall—the tallest structure in the city. It also will be the largest cable-stayed bridge west of the Mississippi River.

Our new $1.5 billion Long Beach Container Terminal (LBCT) is the world’s first all-electric, zero-emissions automated megaterminal. It is owned by Orient Overseas Container Line (OOCL) and is opening in three phases. Phase one opened in April 2016, adding 10 percent more container capacity to the POLB. In 2020, the final phase will be completed, adding another 20 percent of container capacity. Upon completion, LBCT will have the capacity to move 3.3 million TEUs per year. If this terminal were a port, it would be considered the fourth-largest port complex in the United States. In addition, LBCT will be able to handle the largest ships being built—up to 24,000 TEUs. The terminal will have 4,280 feet of berth space and 14 ship-to-shore gantry cranes and can expand to 18 cranes.

POLB also is spending $1 billion to double on-dock rail capacity. Five of our six container terminals have on-dock rail. Currently, we move about 26 percent of all our cargo on rail. Our goal is to reach 50 percent within the next 10 years. Increased use of on-dock rail will significantly relieve truck and terminal congestion and dramatically increase the speed that we move containers through the port. On-dock rail also will increase terminal capacity, allowing us to move more containers per acre on an annual basis. We can continue to grow container volumes without building costly new terminals. Moving cargo by rail is not only more efficient, saving shippers time and money, but it also reduces the impact of port operations on the environment. On average, one train at the port is the equivalent of taking 750 trucks off the road.

Big ships

Why is the POLB spending so much of our resources on infrastructure? We have several reasons, but the main one is big ships. Ever-escalating ship size necessitates new strategic thinking by seaports globally. Consider these numbers: In 2015, we saw overall container volumes jump 7 percent. At the same time, the number of containers went up 54 percent, while the numbers of container ship visits were down 31 percent. This means that we receive more cargo at once, delivered on megasized ships. To stay competitive with other ports and to grow our cargo market share, we must improve our infrastructure so we can accommodate the biggest ships and move mass amounts of cargo efficiently.

How big are these megasized vessels currently arriving at berth at the POLB? In February 2016, our port welcomed the largest vessel to call on North America: the 18,000 TEU Compagnie Maritime d’Affrètement - Compagnie Générale Maritime (CMA CGM) Benjamin Franklin. This vessel is as tall as a 20-story building, as long as four football fields and as wide as a 12-lane freeway. We are a deep-water port; our main channel is 72 feet deep, and many of our berths are larger than 50 feet. We are big-ship ready!

Greening operations

The POLB is doing much more for our shippers, industry and communities than improving our infrastructure. As the “Green Port,” we know economic and environmental sustainability are two sides of the same coin. We continue to implement new strategies to reduce harmful pollution from the port complex and surrounding areas. Since 2005, the POLB has cut diesel particulate matter by 81 percent. In addition, nitrogen oxide emissions were down 54 percent, and sulfur oxide emissions were down 88 percent over the same period. These results, from data collected through 2012, represent six straight years of improving air quality in the harbor area. Initiatives such as the Green Flag, the Green Ship and the Clean Trucks program continue to reduce pollution for the surrounding communities.

We applaud the paper and plastic recycling industries for pushing forward your own sustainable initiatives.

Changing alliances

In the shipping community, overcapacity of vessel space on the water is creating uncertainty and anxiety. Cargo demand has not kept up with increasing ship size. The future of shipping lines and the alliances are in flux. In April 2017, the current four shipping alliances—G6, Ocean 3, 2M and CKYHE—will become three—The Ocean Alliance (CMA CGM, American President Lines [APL], COSCO China Shipping, Evergreen and OOCL), THE Alliance (Nippon Yusen Kaisha [NYK], Kawasaki Kisen Kaisha Ltd. [K-Line], Mitsui O.S.K. Lines [MOL], Yang Ming, Hapag Lloyd) and the 2M (Maersk and Mediterranean Shipping Co. [MSC]).

While these alliances shift, we will see mergers occur. Earlier this year, COSCO and China Shipping announced a merger, and the three Japanese lines—K-Line, MOL and NYK—recently have agreed to merge. Hapax Lloyd is acquiring UASC, Maersk is purchasing Hamburg Sod and Hanjin Shipping went bankrupt. Until containerized cargo supply and demand finds its equilibrium, we will continue to see mergers and acquisitions in the shipping community.

Through all the uncertainty and challenges in the shipping community, the POLB’s value proposition remains strong. The POLB is still the shortest, fastest and most cost-effective gateway for goods moving to Asia. With both Burlington Northern Santa Fe (BNSF) and Union Pacific (UP) servicing the Southern California gateway, the POLB handles cargo from every part of the United States.

Additional priorities

Shipping line challenges aside, POLB recognizes other issues related to the movement of cargo across the maritime supply chain. Our Supply Chain Optimization (SCO) Initiative is ongoing and continues to make the POLB more efficient operationally. With participation and input from all sectors of the supply chain, including shipping lines, shippers, truckers, railroads, labor and container terminals, the POLB is tackling issues such as chassis management and availability, terminal and truck gate issues and data sharing.

Safety and security are top priorities at the POLB. Since Sept. 11, 2001, the POLB and the other government agencies responsible for security have greatly expanded their efforts to protect the port complex and surrounding communities. The POLB takes a leadership role in the development of strategies to mitigate security risks in the port complex, working closely with multiple partners, both public and private, to plan and coordinate security measures. In February 2009, the POLB inaugurated its new, state-of-the art Joint Command and Control Center. The $21 million, 25,000-square-foot facility houses the POLB Security Division and Harbor Patrol, as well as units from other local and federal agencies. In keeping with the port’s Green Port Policy, the structure is LEED (Leadership in Energy and Environmental Design) certified, incorporating environmentally friendly design, recycled materials, energy efficiency and sustainable construction practices.

The POLB believes that, even with many challenges, our future together is big.

The authors are with the Business Development Division of the Port of Long Beach in California.

The year 1995 might have been more than two decades ago, and yet many things introduced that year are still around today. For instance, the internet welcomed eBay Inc., Yahoo and Match, while The Rock and Roll Hall of Fame opened in Cleveland.

Mid America Recycling, headquartered in Des Moines, Iowa, installed a Presona baler at the company’s Lincoln, Nebraska, material recovery facility (MRF) that year. This marked the first time that Sweden-based Presona had entered the U.S. market with its balers, says Mick Barry, president of Mid America Recycling.

Fast forward to early 2016: Presona had since left the U.S. market, while that same old Presona baler packed materials in Mid America’s 40,000-square-foot building. (After leaving the U.S. market for some time, Presona is again being sold and supported by parts and service in the U.S., represented by Stadler America, with U.S. headquarters in Colfax, North Carolina.)

However, Barry says his recycling company recognized the need to replace its 21-year-old baler. After several rebuilds—which included relining the floor and replacing wear plates and harnesses among other fixes—it was time for a change, he says. In addition, Presona leaving the domestic market made replacing parts difficult, Barry says.

“The baler itself was rebuilt three times, and that’s a lot for a baler,” Barry says of the 1995 Presona installation. “It was old and worn out and probably not worth rebuilding again.”

Barry continues, “Are you going to put a $100,000 repair job on a machine that’s almost 30 years old, or are you going to put $200,000 on a new machine? As a business, you’re going to do what makes sense.”

So began the bale-buying process, one Barry is all-too familiar with—Mid America has purchased about 25 balers over the years, he says. In the end, it was all about getting down to business.

Compare competitors

Barry says he and the plant management team at Mid America searched the marketplace high and low for options, almost entirely via the internet. This makes it easier to compare brands and models, he says. From hydraulics and performance statistics to throat characteristics—What is the largest size of cardboard that can fit without jamming?—studying the various features of different balers is time well-spent.

Barry says some questions to consider upfront include:

• How does the supplier address parts and service delays?
• What are the tons per hour and weight per bale?
• What types of commodities can the baler handle?
• What is the baler’s size and how does it fit into the current system?
• What facility changes, if any, from electrical and door sizes to installing concrete, need to be addressed?

Productivity, bale weight and the baler’s footprint should be determined during initial searches. Understanding the hole that is left behind by the previous baler also is important. Additionally, for Mid America, the ability to handle multiple materials was key.

Barry says, “We look for balers that can handle every commodity, and some of the extrusion balers we’ve seen around don’t do as well with containers; they’re used to paper, not something springy like PET (polyethylene terephthalate) containers.”

Another factor to consider is shipping patterns. When it comes to cubing out a shipping container, tractor-trailer or railcar, Barry says it’s important to ensure the baler makes bales with suitable dimensions. With Mid America’s central location in the U.S., considering shipping patterns was important as the company is not close to any ports, making efficient transportation of high importance.

Barry says, “We look at the baler that gives us the good 60-inch-type bale as they’re better on trucks.”

He adds, “What fits the shipping patterns in the region you’re in?”

Once the list of potential balers has been modified based on these criteria, then it’s time to pick up the phone and talk to the manufacturers. Pricing and timeliness of delivery are the next factors to figure out.

Barry says, “I put the matrix together, and we said here’s the three [balers] we liked out of the 15 I matrixed out.

Next, he considered, “Who’s going to really give us what we want? Who could perform quickly and deliver it on-site at the given price?”

Seek advice

Beyond the internet, reaching out to others in the industry can prove helpful. Ask fellow recyclers why they are dedicated to one brand over another, Barry advises.

For Barry, his go-to guy is Steve Sutta, president of Sutta Co., Oakland, California. Sutta has several balers from Imabe of America, based in Miami. Barry and Sutta spent some time on the telephone discussing Imabe balers, with Barry saying he trusts Sutta’s perspective.

“Sutta said, ‘Get this model, not that model,’ as he knew what we wanted. We wanted the bigger one and not the smaller one, so he guided us on what he thought based on what he’s used,” Barry says.

He went with Sutta’s word, selecting an Imabe H120/2000 baler for the company’s Lincoln facility.

“We look for balers that can handle every commodity, and some of the extrusion balers we’ve seen around don’t do as well with containers; they’re used to paper, not something springy like PET containers.” – Mick Barry, Mid America Recycling

Prepare a plan

With the manufacturer selected and specific baler pinned down, working out the logistics is the next step. “You have to plan your change-outs big time,” Barry warns.

He says a baler installation requires a system shutdown and advises choosing a time when the company’s operations will be least effected. Dealing with cranes and other equipment could come into play, depending on the baler’s size.

The installation also requires a company’s entire operational team. Barry says he included this team as well as the logistics crew and even notified customers whose pickups might have been affected by the shutdown.

Because most MRFs don’t operate 24/7, he explains that a successful installation could go like this: Stop system operations Thursday night. Store all materials collected Friday in piles and remove the old baler. Spend Saturday and Sunday setting up the new baler, getting back to business by Monday morning.

“You have to know your flow and understand your flow patterns. Tell a customer, ‘We’re not going to pick you up for a few days. Do you need additional containers?” Barry suggests. “Leave stuff all over the place and run a little overtime the following week so you can get organized.”

Recyclers must determine transportation for the baler.

Imabe of America’s parent company, Imabe Ibérica, is based in Spain, which is where Mid America’s baler arrived from. Barry says Imabe paid the ocean freight to the U.S., with Mid America dealing with the logistics from the port to Lincoln. (The baler traveled by train to Chicago, and by truck the rest of the way to Nebraska.) As the baler manufacturer had recently entered the U.S. market, Barry says Imabe officials expected Mid America to have better contacts at the port. And it did; the company deals with a freight forwarder that handled the paperwork, Barry says.

In the end, determine what is most important to the company when purchasing a new baler. For Mid America, that was time. Barry says if Imabe had not been able to perform in a timely fashion, he might have chosen a different baler manufacturer. Fortunately, the supplier stuck to its word.

“We heard they were good for their word, and as a testimonial, they were better than their word,” Barry says.

The author is associate editor of Recycling Today and can be contacted via email at mworkman@gie.net.

Following several years of sluggish copper markets, 2017 might finally be when a long-expected recovery takes hold, according to scrap dealers, copper producers and other industry observers. While the prevailing mood of the market is positive, enough questions and uncertainty remain for all but the most bullish prognosticators to hedge their upbeat sentiments.

Despite this agreement that 2017 will be a year of recovery, copper pricing might still be volatile, though most sources say it is highly unlikely that prices will fall as low as they did in early 2016. Sources caution that the potential for any number of “black swan” events, including the new presidential administration in the United States, could change the outlook for copper radically.

Presently, copper is benefitting from positive trends. Since the fourth quarter of 2016, copper prices have shown strong upward movement, though they seem to have backed down a bit toward the middle of January 2017. This retrenching, however, is not causing much concern, according to sources, though several analysts are cautioning that in the near term a further price correction could occur.

Will Adams, head of research at Fast Markets, a U.K.-based metals research firm, says copper has been on a pronounced upswing since the fourth quarter of 2016. The improvement has pushed copper prices “quite high,” he says. However, “By early January prices have run ahead of the fundamentals, and there could be a reality check,” he adds. “We should know in the next few weeks.”

China’s influence

Although prices could decline further, Adams says he is moderately bullish regarding the next several quarters. One factor that buoys his optimism is the fact that China’s economy “is beginning to turn the corner,” he says.

A prolonged recovery of copper is dependent on a healthy Chinese economy. And, while the Chinese government has targeted 6.5 percent growth as part of its newest five-year plan, it also is looking to reduce the speculative bubble that has swelled in many parts of China’s economy (notably the real estate sector) and is cracking down on corruption.

Despite the challenges, several investment and banking houses have gone from being market bears to being bullish on copper. Goldman Sachs, for one, held one of the more pessimistic outlooks for copper through most of 2016. Recently, however, the company’s analysts have adopted a more favorable outlook.

In commentary released in December 2016, Goldman Sachs analysts write that “stronger fundamental developments ... contributed to this surge in speculative interest and are likely to underpin a more bullish environment for copper.”

The improvement, Goldman Sachs’ analysts continue, shows that demand is stronger than expected and should be able to handle the supply of copper on the market. In its analysis, Goldman Sachs also reversed its earlier supply outlook from a surplus of 360,000 metric tons to a deficit of 180,000 metric tons. Reportedly, the decisive factor in this reversal was China’s copper demand, which appears to be higher than originally estimated.

For several scrap dealers, a modestly improved market and higher prices, which on the one hand are welcome, also signal a need for caution.

“While I hate to turn away material, I must be careful with the higher prices,” one large U.S. copper scrap buyer says. “I do feel better about the (economic) environment. Although with these higher prices, I need to see the demand match prices.”

He continues, “I am cautiously buying, although I am watching my cash.”

The copper buyer says he is seeing improved buying from consumers, notably in the plumbing and construction sectors, but the buying isn’t consistent across all sectors. “It seems to be more of a company-by-company basis [as far as] who is doing well.”

However, he adds that generation of copper production scrap is improving.

A copper scrap exporter also sees some reason for optimism in 2017, though he says he sees plenty of headwinds over the next several months, especially out of China.

One nonferrous scrap exporter says the Chinese government has undertaken an extensive environmental review of all manufacturing operations in the country. The exporter questions whether some copper scrap consumers will be able to meet the more stringent environmental criteria introduced by the government and if they will remain closed after Chinese New Year.

He notes that a large percentage of the problem manufacturing plants are in the southern part of China.

Longer term, the exporter speculates that the environmental review could be positive, as it could lead to the building of new capacity that is designed with the proper environmental safeguards. However, for the short term, the change could result in a drop in the number of buyers of copper scrap in China.

Adams agrees, saying the policy is a multiyear approach by China’s central government to grapple with the extreme pollution of the past several years.

China remains the largest consumer of copper and copper scrap (accounting for roughly 45 percent of world demand). The country is reporting stronger economic figures, which are reflected in an uptick in copper demand over the final quarter of 2016.

Supporting this notion of an improving Chinese economy, the Caixin Purchasing Managers’ Index, which is a private gauge of nationwide factory activity in the country, reached 51.9 in December 2016, its highest level in nearly three years.

The improvement in the purchasing managers’ index was joined by an increase in retail sales, which grew by nearly 11 percent in November, while industrial production in China increased by 6.2 percent, topping previous expectations.

The relative health of the Chinese economy will drive copper and copper scrap markets in 2017. The improved outlook that was on display toward the end of 2016 was because of the increase in apparent demand from Chinese sources, according to the International Copper Study Group (ICSG), Lisbon, Portugal.

In its report for the third quarter, the ICSG notes that Chinese apparent demand for copper increased by roughly 7 percent over the first nine months of 2016 based on a 2 percent increase in net imports of refined copper and 7 percent growth in refined production.

Adding to the more positive outlook for China, the most recent data released by the Chinese General Administration of Customs show the country imported 49 million tons of unwrought copper and copper materials in December 2016, close to a 30 percent increase from the prior month.

While China’s thirst for copper picked up, global demand outside the country was unchanged in 2016, ICSG says.

Finding balance

The oversupply of copper, one of the big factors for the slump in prices over the past several years, appears to be easing.

On the production side, the ICSG reports a deficit of 15,000 metric tons of refined copper in September 2016, which followed a surplus of 156,000 metric tons the prior month.

Supporting the optimistic view of copper markets in the near term is Germany-based Aurubis, one of the largest copper scrap consumers in the world and perhaps the largest in Europe. Aurubis says copper, which lagged other nonferrous metals for a long time, rallied toward the end of 2016.

However, the company adds in its online “Copper Mail” bulletin, “It seems unlikely that the turbulence on the global markets will decrease in 2017. Instead, political influences should be expected to intensify, increasing risks at the same time.”

Aurubis continues, “There are definitely hopeful developments as well. Economic indicators are pointing upward around the world, with few exceptions, and the emerging markets in particular are benefiting from higher commodity prices.”

Despite its cautionary tone, Aurubis says the global market is deficient in copper, while demand for the metal increased by 3 percent. Global copper production showed a deficit of 84,000 metric tons, while demand increased by 565,000 metric tons, Aurubis’ “Copper Mail” notes.

Meanwhile, the supply of copper on the market should be stable, according to the ICSG. In a forecast made in late 2016, ICSG says that while output from current operating mines, especially in China, will pick up, that growth will be offset by a 6 percent decline in global production and a lack of new major mine products.

In Europe, the copper scrap market also has seen a bit of a dip recently. Aurubis says the European copper scrap market was indicating good supply in December, though activity subsided gradually because of a combination of copper price declines and the holidays. “The good physical and contractual supply situation among scrap processors in Europe, who distanced themselves from deliveries at short notice in day-to-day business, contributed to the situation,” Aurubis writes.

Influencing factors

With attention toward the supply of copper on the market, several issues might shift the market outlook. In a surprise move, the Indonesian government has announced it will end its ban on exporting nickel ore and bauxite, which was enacted in 2014, and will extend a temporary deal to export copper concentrate, according to an article in the Financial Times. However, it might take several weeks to free up the flow of copper from Indonesia.

While Indonesia’s move could increase the global supply of mined copper, a number of potential labor issues could work counter to that. Adams says this year could have more potential supply disruptions compared with historical standards.

Along with potential disruptions, very little in the way of new mining capacity is coming online, which should constrain the supply of new copper.

Prior to officially taking office, U.S. President Donald Trump called for massive investment in infrastructure—as much as $1 trillion over the next 10 years. These projects would require a significant amount of copper, helping to increase copper prices.

On the topic of Trump, one copper scrap dealer says, while he is in favor of a presidential administration that eases onerous regulatory policies that can make it difficult for his firm to remain in business, he worries that some of Trump’s “protectionist” trade policies could have a negative impact. “We are in favor of free and fair trade,” he says. “If the United States and a country such as China get into a trade war, markets could be adversely impacted.”

The author is senior editor with Recycling Today and can be contacted via email at dsandoval@gie.net.

With holiday and maintenance-related shutdowns behind us as of January 2017, a Chicago-area broker dealing largely in engineering resins says industrial generation of plastic scrap is increasing as operations restart.

A Midwest-based reprocessor whose company serves the auto industry agrees, saying his clients have been generating more scrap over the past six months as their production increases.

While the broker expects generation to remain steady through the first quarter, he says that will depend on the strength of consumer confidence.

As of December, consumer confidence was increasing, which Lynn Franco, director of economic indicators at The Conference Board, attributes to “the post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices, which reached a 13-year high.”

The index stood at 113.7 in December, up from 109.4 in November, while the Expectations Index increased from 94.4 to 105.5.

Franco adds, “Looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized.”

The Chicago-area broker says this confidence will be tested if the U.S. Federal Reserve continues to raise interest rates.

He also describes Trump as “the biggest wildcard” at play, mentioning his actions that are provoking the Chinese government and his talk of renegotiating the North American Free Trade Agreement (NAFTA).

Regarding domestic demand as of mid-January, the broker says “some materials are strong and getting stronger, and others are lackluster.”

Among the secondary engineering plastics he’s seeing reduced demand for are polycarbonate (PC), nylon, acrylonitrile butadiene styrene (ABS), polyvinyl toluene (PVT) and polytetrafluoroethylene (PTFE).

“We are seeing decreased demand for PP, PE (polyethylene) and TPO (thermoplastic olefin) as the price of virgin material is so low, the top recycling buyers are buying virgin instead of recycled,” the reprocessor says. “This is causing the recycled resin to be purchased at lower prices to the second-tier buyers, who are not consuming enough to keep up with the supply.”

Regarding overseas buying, the broker says pricing is low for secondary engineering grades.

Overseas demand for postconsumer material appears to be better, with a California-based broker saying, “Export prices were historically low but steady through most of the second half of 2016, but we are seeing a slick uptick in prices in the beginning of 2017 so far.” He adds, “PET (polyethylene terephthalate) is having a really good price run in the Asia market right now.”

However, efforts in China to address environmental pollution could affect the volume of plastic scrap being imported, the California-based broker says. “Many industrial centers are being regulated and restricted heavily,” he says, “which will definitely affect overall demand for plastic if it continues for many months.”

Regarding transportation within North America, the California-based broker says gasoline shortages in Mexico are creating “a lot of issues” trucking material into and out of that country, while the reprocessor mentions higher freight rates in the Midwest, with costs on some lanes increasing nearly 30 percent.