Volatility has characterized many scrap markets this year, including ferrous scrap. Prices plummeted at the onset of the COVID-19 pandemic in April and May, particularly as manufacturing shut down in light of lockdowns. But by June and July, ferrous scrap prices began to inch upward, and, as of August and September, ferrous scrap prices are looking more optimistic.

During the ISRI 2020 Commodities Roundtable Forum: Ferrous Spotlight, hosted by the Washington-based Institute of Scrap Recycling Industries (ISRI) Sept. 14-17 in a virtual format, Blake Hurtik, editor of Argus Media, reported that steel mills have higher levels of demand for ferrous scrap than they had prior to the start of the pandemic. Hurtik said ferrous markets saw a “healthy $30 to $50 per ton increase” this month, adding that obsolete and shredded scrap performed well and busheling scrap prices are up by about $10 this month. He added that “export markets are hot” as well. 

“You see rebound in demand prices coupled with the export market,” he said. “Supply has been the driver for scrap prices much of the summer.” 

As of August, Hurtik said Midwest hot-rolled coil (HRC) and busheling prices rose to about $300 per ton, with a little bit of a downtick in September. “For September trade, we saw heavy trading volumes, eager to buy volumes ahead of what we’re seeing on order,” he said.

During the ferrous spotlight panel discussion, panelists all noted concern surrounding recovery in the energy marketplace and how that could affect ferrous scrap. Tom Knippel, vice president of commercial industrial at Orange, California-based SA Recycling, said he’s doubtful the energy market will recover anytime soon, and that’s affecting steel demand for pipe production and plate rig counts.

“It’s still down with no signs of recovery,” he said, noting that West Texas Intermediate prices are down quite a bit and oil prices are below recent norms. 

Spencer Johnson, London Metal Exchange (LME) trade desk analyst at New York City-based INTL FC Stone, added that the economic outlook for the energy sector is “uncertain.”

“There’s a lot of risk, more so in terms of downside and upside price risk,” he said, adding that, “Right now, the levels of uncertainty are driving a risk-off approach.”

Overseas demand for ferrous scrap

With export markets, Turkey is driving the steady rise in pricing, Hurtik noted, adding that strong domestic rebar demand is helping to sustain pricing in Turkey. 

In Asia, he said container prices into Taiwan are steadily rising as well. India’s lockdowns related to the pandemic are also easing up, and some steel demand is reemerging there a little bit. 

Another trend is China emerging as a player in the pig iron market, he said. Prior to the fall of 2019, China was not heavily involved as a purchaser of pig iron. But this year, that nation has purchased a lot more pig iron in response to elevated iron ore prices. Hurtik added it’s uncertain how long China will remain a large purchaser of pig iron. 

“China is not the 900-pound gorilla, but it’s the 9,000-pound gorilla,” Knippel said in the panel discussion, noting that China is expected to produce 1 billion tons of steel this year. “They have always been the main driver of steel at the end of the day. Five years ago when China was exporting heavily and looking at what that did to steel prices, we’re in the same boat today. We benefit from China, whether we like it or not. Strength in the China market has kept steel prices high enough that China was an importer of steel in July when they normally export. It’s kept scrap in the country to reduce costs and pollution. They drive the world steel market.” 

Johnson added, “We can set up trade barriers but China will still have an impact” on the steel market in the U.S.

Capacity on the horizon

Steel mill capacity utilization rates also are trending upward. At the start of the pandemic, that rate dropped from the low 80 percent rate to near the 50 percent mark. But Johnson said that has inched up throughout the summer and is at nearly 65 percent now. 

Hurtik noted that a lot of steel mills were taken down at the onset of COVID-19, but many of those are starting to come back online as summer comes to a close. As of September, Hurtik reported that the following blast furnaces have restarted: 

• U.S. Steel Mon Valley No. 1, with 1.5 million tons per year of capacity;
• U.S. Steel Gary Works No. 8, with 1.2 million tons per year of capacity;
• U.S. Steel Gary Works No. 6, with 1.36 million tons per year of capacity;
• ArcelorMittal Indiana Harbor No 4, with 1.72 million tons per year of capacity;
• ArcelorMittal Burns Harbor C, with 2.73 million tons per year of capacity; and
• Cliffs/AK Steel’s Dearborn blast furnace, with 2.2 million tons per year of capacity.

As of mid-September, U.S. Steel has two blast furnaces still down—its Gary Works No. 4, with 1.5 million tons per year of capacity, and its Granite City A, with 1.4 million tons per year of capacity—and ArcelorMittal has two blast furnaces down—its Cleveland No. 6, with 1.51 million tons per year of capacity, and its Burns Harbor D, with 2.73 million tons per year of capacity. However, all of these are expected to come back online at some point.

Hurtik added that at least four electric arc furnaces (EAF) went down at the onset of the pandemic, including Gerdau’s EAF mill in Monroe, Michigan; Gerdau’s EAF mill in Jackson, Michigan; Tenaris’ EAF mill in Koppel, Pennsylvania; and JSW USA’s EAF mill in Mingo Junction, Ohio. None have come back yet except Gerdau’s Monroe mill. He noted that the Tenaris and Mingo Junction mills are making investments to improve their capabilities. 

“They aren’t down for the count, but they will come back with the idea of improving for the long run,” he said.

Despite the pandemic, there is also a lot of optimism for new EAF capacity in the works. Hurtik of Argus Media said the following mills have EAF capacity expansions planned in the near-term future:

• Nucor’s Sedalia, Missouri, greenfield site will add 450,000 tons per year of capacity and was expected to come online in the first quarter of 2020.
• Nucor’s Frostproof, Florida, greenfield site will add 450,000 tons per year of capacity and is expected to come online in the fourth quarter of 2020.
• U.S. Steel’s Fairfield, Alabama, site will add 1.6 million tons per year of capacity and is expected to come online in the second half of 2020.
• SDI’s Sinton, Texas, greenfield site will add 3 million tons per year of capacity and is expected to come online in mid-2021.
• Big River Steel’s Osceola, Arkansas, site will add 1.6 million tons per year of capacity and is expected to come online in the fourth quarter of 2020.
• Nucor’s Gallatin, Kentucky, site will add 1.4 million tons per year of capacity and is expected to come online in mid-2021. 
• Nucor’s Brandenburg, Kentucky, greenfield site will add 1.2 million tons per year of capacity and is expected to come online in 2022.
• North Star BlueScope’s Delta, Ohio, site will add 850,000 tons per year of capacity and is expected to come online in 2022. 
• ArcelorMittal’s Calvert, Alabama, site will add 1.6 million tons per year of capacity and is expected to come online in the second half of 2022.
• Commercial Metals Co.’s Mesa, Arizona, site will add 500,000 tons per year of capacity and is expected to come online in 2023.

Upstate Shredding - Weitsman Recycling

Upstate Shredding – Weitsman Recycling, headquartered in Owego, New York, has announced that it hired Bob Frank to its team at Ben Weitsman of Rochester, Rochester, New York, as a regional general manager and vice president of commercial accounts.

Frank comes to Ben Weitsman of Rochester after working for 13 years at Metalico, a competing scrap metal recycling facility in Rochester. Frank first joined the recycling industry at the age of 14, working for his family’s Samuel Frank Metal Co.

According to a news release from Upstate Shredding – Weitsman Recycling, he offers the company a record of entrepreneurial business achievements. The company also says Weitsman and Frank, though competitors for many years, have always maintained mutual respect for each other and look forward to combining their efforts as Frank joins the Upstate Shredding team.

“I am excited to announce my new venture with Ben Weitsman of Rochester,” Frank says. “[Owner Adam Weitsman] and I now have a combined vision to capitalize on each other’s strengths and to collaborate to utilize my desire for superior customer service and my ability to build long-term relationships with Adam’s commitment to operational excellence. I think our partnership will create an unparalleled opportunity for scrap metal customers in the region.”

Hyundai Construction Equipment Americas (HCEA), Norcross, Georgia, has announced the expansion of its North American authorized dealer network with the addition of Clinton Township, Michigan-based United Truck Sales.

United Truck Sales is a tractor, trailer and heavy truck dealership, and will be focusing specifically on Hyundai compact excavator equipment in HCEA’s North Central territory. 

“I’m very excited to add United Truck Sales as a Hyundai compact excavator dealer for the Detroit Tri-County area,” said Ed Harseim, HCEA District Manager-North Central. “We have a great lineup of compact excavator products that only continues to grow and get better with the addition of new products and features, including our standard 3-year, 3,000-hour warranty. United Truck Sales has a unique product support skill set with their ability to service everything from semi-trucks to construction equipment.  They also have a tremendous passion for their business and offer their customers the best support possible.  They are a great addition to the Hyundai network of dealers.”

With the addition of this new dealership, Hyundai’s North American network now includes more than 75 dealerships operating in just over 165 locations, offering sales, service and parts for the full line of Hyundai excavators, wheel loaders, compaction rollers and other construction equipment.

According to Hyundai, the company’s sales, service and parts teams deliver regular product and service training to ensure dealer partners are able to provide top-caliber support to meet the growing business needs of Hyundai Construction Equipment customers.

The third day of WasteExpo Together Online opened with a keynote discussion between author and Bloomberg Opinion columnist Adam Minter and Waste360 Content & Marketing Director Liz Bothwell, who served as the moderator.

Minter wrote the 2013 best-seller, Junkyard Planet: Travels in the Billion Dollar Trash Trade. He followed this up with his most recent book, Secondhand: Travels in the New Global Garage Sale in 2019.

Minter’s presentation, Stuff: The Hidden Borderland of Waste and Recycling, highlights the journey materials take throughout the waste stream.

Minter tells the tale of how in the early 2000s when he was working as a reporter focused on the recycling industry, he got the idea to write a book pertaining to how everyday items become valuable through recycling. The first item that caught his attention when touring a scrap yard was Christmas lights. After working to investigate where this material comes from and who recycles it, Minter ended up in China at a place that specializes in deriving value from these materials.

As part of his presentation, Minter showed video from a Chinese facility that has a dedicated system for Christmas light recycling. As part of this operation, workers load bundles of lights imported in from the U.S. into a shredder along with water to cool the system. The resulting mix of plastic, glass and copper is run through a water table where the copper is segregated from the rest of the lighter material and able to be harvested by shovel to recover its value. This copper is then sold back to Christmas light manufacturers. The plastic, Minter says, is also recovered and sent to a local slipper sole manufacturer who uses it in its operations. The wastewater from the shredders was able to be reused on-site.

Minter says this process exemplifies a real-life example of the circular economy at work. The problem, he notes, is that thanks to a confluence of factors in China that culminated in the National Sword import ban, the varied markets that use to be available for U.S. recyclables (even with specialty items like Christmas lights) have dried up.

His takeaway is that the way in which we manage waste needs to change.

“I think we’ve all learned over the last couple of years that recycling is important, essential to environmental stewardship and to our waste management regimes, but it is not in and of itself sufficient to take care of the issue of [our waste],” Minter says.

The solution, according to Minter, lies in the way we think about repurposing materials. Minter uses the example of Good Point Recycling, an electrics recycler in Middlebury, Vermont, that sends computers, monitors and other electronics to Ghana.  

There, these recycled electronics are either fixed if needed or sold outright across the country.

“Just like folks everywhere, folks in Ghana want to get onto the information superhighway,” Minter says. “[This is stuff] that has not been imported to be burned, it’s been imported to be reused and because it can be used cheaper and because it has been massively pretested so it will last long. If it has been sitting in an American’s living room for five years, it is probably a pretty good computer.”

Minter also notes that there are businesses in Ghana where computers that are no longer functional are stored, and when someone comes in with a computer with a broken monitor, for example, these older computers can be parted out to fix the issue.

“Most of the computers on these shelves would be recyclables, or tossables, where they’d be tossed into people’s garbage or into the landfill. And we know that still goes on, but in Ghana in particular, this is valuable inventory. It’s a means of ensuring stuff lasts longer,” he says.

He says that laptops that might be only used for a few years in the U.S. can have a 10- to 15-year shelf life in Ghana because of the value of their parts.  

Minter also recounts how television repair pros in Ghana can take decades-old TVs and repair them to give them a second life. The key is having the parts to repair these systems, which can be difficult with older models.  

Embracing the value of the parts in recycled electronics is something that Good Point Recycling’s owner Robin Ingenthron has taken to heart. Minter says workers at Good Point have become adept at salvaging parts from discarded electronics. These parts are then sold on eBay for healthy profits.

“We don’t just need to learn from the most advanced recycling systems,” Minter says. “In many cases, what we really need to be doing is to be learning from and rethinking what’s going on in emerging markets because, in many ways, they’re ahead of us when it comes to what it means to have a circular economy.”