After a year of upward momentum, scrap processors had to contend with ferrous inventory that lost some value in the September buying period.
A hectic summer’s worth of supply combined with tepid overseas demand and domestic mill buying that has plateaued brought downward price pressure to the ferrous scrap market.
The steel industry received attention in the wider financial press in late summer, with output cutbacks in China (by far the world’s largest steel producer) putting downward pressure on the price of iron ore globally and finished steel in much of Asia.
Flattening steel production patterns contributed to Fastmarkets AMM Midwest Index prices in early September that saw prime busheling scrap drop from roughly $650 per ton in August to about $600 per ton in September.
Contrary to the prevailing trend of the previous two decades, output in China declined in July, while production in the rest of the world increased. Figures collected by the Brussels-based World Steel Association showed China with July production of 86.8 million metric tons, down by more than 7 million tons from the June figure of 93.9 million metric tons.
A government effort to reduce carbon emissions has been cited as the predominant reason for the steelmaking decline in China. Economists are keen to determine whether a retreat from the massive infrastructure spending and apartment tower building of the previous two decades also could be contributing to a steel slowdown.
In the run-up to the early September mill buying period reflected in Fastmarkets AMM surveyed pricing, weekly U.S. steel output measured by the Washington-based American Iron and Steel Institute (AISI) portrayed an industry in which the revival from previous COVID-19-related woes could be sputtering.
AISI says U.S. raw steel production in the week ending Sept. 4 checked in at 1.866 million tons, which is down 0.4 percent from the previous week, when production surpassed 1.873 million tons. In the first two weeks of August, U.S. weekly raw steel production also fell by 0.2 percent compared with the week before.
The flattening production patterns contributed to Fastmarkets AMM Midwest Index prices in early September that saw prime busheling scrap drop from roughly $650 per ton in August to approximately $600 per ton in September.
Obsolete grade prices also dropped in September, with shredded scrap losing about $10 per ton in value and No. 1 heavy melting steel (HMS) declining by about $20 per ton in the Midwest.
The fate of obsolete grades was not helped by skittish behavior from overseas buyers in August and early September. That trend might have started reversing in mid-September, with the Davis Index news service reporting that buyers in India and Bangladesh were beginning to bid up imported HMS and containerized shred prices (though Davis Index indicates the Turkish market remained soft).
Also offering better news to ferrous scrap dealers is the relative strength of the domestic steel sector compared with last year. Despite a mild downtrend in late summer domestic steel output, the sector remains well-ahead of its pace in 2020, when COVID-19 disruptions caused mill output to plummet.
Production the week ending Sept. 4, 2020, was 1.51 million tons, representing 23.5 percent less output compared with the comparable week this year. In early September 2020, the mill capability (capacity) utilization rate was 67.4 percent compared with 84.5 percent in early September this year.
Ferrous scrap prices going forward remain tied to the prospects for the U.S. economy, including the steel-absorbing automotive and construction sectors.
The auto industry continues to suffer from a lack of access to the microchips used in increasingly computerized car and truck models. Toyota Motors announced cutbacks in North America in August and September, delaying the assembly of about 150,000 vehicles. Argus Media calculated, in a mid-September news item, that since the average North American vehicle consumes nearly 1 ton of steel, per AISI, the Toyota cuts could mean some 250,000 tons of steel that otherwise would have been consumed will not be needed.
Ford Motor Co. has reported a 33 percent decline in sales in August 2021 compared with August 2020, based not on falling customer demand but on a lack of fully assembled vehicles to deliver.
The construction sector, which is less affected by the global microchip shortage, instead is expressing frustration with trends in the domestic metals market.
The Arlington, Virginia-based Association of General Contractors of America, in a mid-September email, cites its producer price index, which shows that steel mill products have increased by 123 percent in price compared with last August, while copper, brass and aluminum product prices have risen by from 35 to 45 percent.
Every Bottle Back, Closed Loop Partners invest in Evergreen
The American Beverage Association and the Ohio Beverage Association, in partnership with Closed Loop Partners, are investing $5 million toward Evergreen’s $22 million expansion of its polyethylene terephthalate (PET) recycling plant in Clyde, Ohio. Half of the $5 million investment is from the American Beverage Association in partnership with Closed Loop Partners through the beverage industry’s Every Bottle Back initiative, and the other half is from Closed Loop Partners’ Infrastructure Fund.
Earlier this year, Evergreen announced its plans to double production capacity at its plant to 80 million pounds of recycled PET (rPET) annually by 2022.
Greg Johnson, Evergreen corporate vice president, told Recycling Today at the time of the announcement that the investment will include upgrading four of the six optical flake sorters on its wash line with equipment from Tomra Sorting Recycling, Germany, as well as the addition of 54,000 square feet to its existing 240,000-square-foot building in Clyde to accommodate a third pelletizing line to be supplied by Vienna-based Starlinger. Evergreen also will install two solid-state polycondensation (SSP) reactors from Starlinger, on two of its pelletizing lines. The SSP reactors decontaminate the flakes and increase the intrinsic viscosity of the rPET pellets the company produces, according to Starlinger.
In a news release issued by Every Bottle Back, Omar Abuaita, CEO of Greenbridge, the Mentor, Ohio-based parent company of Evergreen, says, “Evergreen is pleased to partner with the Ohio Beverage Association and Closed Loop Partners to expand our Clyde recycling and manufacturing facility and accommodate the heightened demand for rPET.”
Abuaita adds that the facility’s expansion will “create new jobs while building on our company’s commitment to recycling, sustainability and closed-loop solutions.”
“We are excited to support Evergreen’s expansion, which will help Ohio’s beverage companies close the loop on its 100-percent-recyclable beverage containers,” says Kimberly McConville, executive director of the Ohio Beverage Association, Columbus, Ohio, in the news release. “This is the second Every Bottle Back investment in Ohio, building on our industry’s commitment to strengthen recycling infrastructure, increase the collection of our plastic bottles and work towards using more recycled content.”
Every Bottle Back previously partnered with The Recycling Partnership, Falls Church, Virginia, and Solid Waste Authority of Central Ohio (SWACO) to invest in Ohio’s Pleasant Township and the city of Whitehall. Those communities received grants to purchase new carts and to deliver recycling education materials to every home as part of SWACO’s ongoing “Recycle Right, Make a Difference” program.
Lead by the American Beverage Association, Every Bottle Back is an initiative by The Coca-Cola Co., Keurig Dr Pepper and PepsiCo designed to reduce the beverage industry’s plastic footprint by getting back more of the industry’s recyclable plastic bottles to be remade into new bottles. This latest investment will help finance the new building at Evergreen’s Clyde plant.
“Through our partnership with Evergreen and Closed Loop Partners, this project—along with several others throughout the region and country—will help capture and process more of our valuable, 100-percent-recyclable plastic bottles so they can be remade into new bottles,” says Katherine Lugar, president and CEO of the American Beverage Association. “This project is another example of the power of private-public partnerships created through Every Bottle Back to build a circular economy for plastic and keep it out of the environment.”
Ron Gonen, founder and CEO of Closed Loop Partners, New York City, says, “To build a truly circular economy and meet the demand for food-grade recycled content, bottle-to-bottle recycling is critical. This investment in Evergreen helps strengthen the market for recycled plastics and inspire other local markets and states to participate in building a waste-free future. Together, Evergreen and the American Beverage Association have pooled key resources to make this project a priority, underscoring the importance of working across the public and private sectors to reduce the use of new plastic and protect the planet for future generations.”
The Washington-based American Beverage Association says the Evergreen investment is the 10th of 13 initial projects the beverage industry has committed to fund under Every Bottle Back. To date, through Every Bottle Back the industry has committed $10.6 million in funding to projects that it says will yield an estimated 647 million more pounds of PET over 10 years.
Waste Connections Inc., Ontario, has acquired E.L. Harvey & Sons Inc. With a 110-year history dating back four generations, E.L. Harvey & Sons is the largest family-owned and -operated solid waste services company in Massachusetts, with total annualized revenue of approximately $110 million.
E.L. Harvey, based in Westborough, Massachusetts, provides solid waste collection, recycling and transfer services to commercial, industrial, municipal and residential customers primarily in central and eastern Massachusetts, as well as in southern New Hampshire. The company operates a single-stream material recovery facility that processes 7,000 to 8,000 tons per month and offers confidential document destruction, food waste and product destruction and electronics recycling services. It operates a fleet of 120 collection vehicles.
“The Harvey family has established one of the most respected companies in our industry, and we are honored to welcome Harvey to the Waste Connections family,” Worthing F. Jackman, president and CEO of Waste Connections, says. “Together with their continuing leadership team, we look forward to carrying on the Harvey name and further expanding its market position, as well as enhancing its strong culture of support for its employees, customers and communities.”
SA Recycling LLC, headquartered in Orange, California, says it has acquired the business assets of Southern Recycling LLC, including locations in Nashville, Tennessee, and in Bowling Green and Owensboro, Kentucky. Southern Recycling’s Nashville location also includes an auto shredder.
The assets were purchased from Kentucky-based Houchens Industries Inc., with the acquisition closing and becoming effective Aug. 13.
SA Recycling says it has retained the employees of Southern Recycling, “and operations will continue uninterrupted effective Monday, Aug. 16, under the name SA Recycling LLC.” The company says the purchase allows SA “to further increase its Southeast shredding and metals operations, as well as increase its scrap purchasing volumes in the area.”
In February of 2016, SA Recycling made its first entry into the Southeast scrap market when it purchased the 17 scrap processing facilities of the former Newell Recycling Southeast LLC. In November 2017, SA acquired the assets of Tennessee Valley Recycling LLC, which was based in Decatur, Alabama, and had seven locations in Alabama and Tennessee.
In 2018, SA made two more moves in the Southeast, acquiring the assets of Georgia Recyclers in Savannah, Georgia, and assuming the operations of yards in Mobile, Alabama, and Hattiesburg, Mississippi, from St. Louis-based Alter Trading Corp.
Last year, SA acquired the assets of Steel City Recycling in Birmingham, Alabama, and West Point, Mississippi. Earlier this year, SA entered the Florida market with the purchases of Capital Scrap (Pompano Beach, Stuart and West Palm Beach, Florida); Metals USA (Lauderhill, Miami and Opa Locka, Florida); and Southern Scrap (Pensacola, Florida).
In total, SA Recycling says it now operates 87 scrap processing facilities in multiple regions in the United States, including 15 shredders. It has deep-water loading operations in the California ports of Long Beach and Los Angeles and in Savannah. The company is headed by CEO George Adams and is a joint venture between California-based Adams Steel and Australia-based Sims Ltd.
Houchens Industries is departing the scrap industry but remains a sizable 100-percent-employee-owned company with more than 16,000 employees. Its holdings include food stores, restaurants, pharmacies, retail optical stores and a presence in the insurance, highway and commercial construction, distribution and manufacturing sectors.
Schnitzer announces plan to acquire Columbus Recycling
Schnitzer Steel Industries Inc., headquartered in Portland, Oregon, says it entered into a definitive agreement Aug. 12 to acquire Columbus Recycling, with ferrous and nonferrous recycling operations in the Southeast.
Columbus Recycling is a provider of ferrous and nonferrous metal recycling products and services that operates eight facilities across several states in the Southeast, including Mississippi, Tennessee and Kentucky. The company’s Ashland, Kentucky, yard includes an auto shredder.
Schnitzer says the transaction is expected to close during the first quarter of the company’s 2022 fiscal year, subject to regulatory approvals.
Founded in 1956, Schnitzer says Columbus Recycling has a well-established customer-focused business that purchases and processes scrap metal from industrial manufacturers, local recycling companies and individuals, selling the recycled products to regional foundries and steel mills. Combined with Schnitzer’s nine existing facilities in Georgia, Alabama and Tennessee, the acquired operations will offer additional recycling products, services and logistics solutions to customers and suppliers across the Southeast, a region that is expected to see a significant increase in electric arc furnace steelmaking capacity in the coming years, the company says.
In the 12 months through the end of May, Columbus Recycling has delivered annual sales volumes of approximately 300,000 ferrous tons which, on a proforma basis, Schnitzer says would increase its total ferrous volumes by approximately 7 percent over the same period.
“The acquisition of Columbus Recycling will expand our platform and offerings in a robust regional market with immediate scale and meaningful synergies,” Chairman and Chief Executive Officer of Schnitzer Steel Industries Tamara Lundgren says.
She adds, “The transaction is consistent with our growth strategy to expand metals recycling operations to meet anticipated increases in steel and nonferrous metals demand driven in part by the global transition to low-carbon technologies. While a variety of solutions will be required as industries, communities and governments actively pursue carbon reduction, the increased use of recycled metals is one path that is immediately achievable.”
Schnitzer also announced the restart of production at its Cascade Steel Rolling Mills in McMinnville, Oregon.
The restart of production at Cascade Steel followed the substantial completion of replacement and repairs of property and equipment at the mill’s melt shop that had been lost or damaged by a fire May 22, Schnitzer says. Cascade has resumed operations with a full workforce several weeks ahead of schedule and is accepting orders for its full range of finished steel products based on the rolling schedule. In light of the timing of the restart and the ramp-up in operations, Schnitzer says Cascade is expected to complete a limited number of sales prior to the end of August, the close of its fiscal year.
Regarding the restart, Lundgren says, “I am proud of our team’s exceptional efforts to bring the mill back into production ahead of schedule, enabling us to support our customers with high-quality finished steel products. Cascade is powered by electricity that is more than 95 percent carbon-free. Combined with the use of recycled metal as its primary raw material, the steel made in our electric arc furnace steel mill has an exceptionally low-carbon impact as compared to the industry average.”
Photo courtesy of Li-Cycle
Li-Cycle to expand spoke network
Lithium-ion battery recycler Li-Cycle, headquartered in Toronto, says it will build its fourth commercial lithium-ion battery recycling facility in Tuscaloosa, Alabama. The site will join the company’s Kingston, Ontario, and Rochester, New York, spokes, which are operational, and its Gilbert, Arizona, spoke, which Li-Cycle says is in “advanced execution stages.”
Li-Cycle says it decided to construct its fourth spoke because the deployment of new battery mega-factories is far exceeding its initial expectations. Supporters of the project include Univar Solutions and its existing automotive customer base; the Alabama Automotive Manufacturers Association (AAMA); the state of Alabama, including the Alabama Department of Commerce; and the Tuscaloosa County Economic Development Authority.
“Our new facility in Alabama positions us well to meet the growing demand for lithium-ion battery recycling,” says Tim Johnston, co-founder and executive chairman of Li-Cycle. “Originally, we had planned on rolling out three commercial spoke facilities in North America over the next five years, with a total recycling capacity of 20,000 [metric tons] per year. However, demand for lithium-ion battery recycling has continued to outperform our forecasts, and we are now forecasting total recycling capacity of 30,000 [metric tons] per year. This facility is essential in filling a recycling gap in the southeastern United States. Like our Arizona Spoke, we expect the new facility to have the capability to process entire vehicle battery packs, without dismantling.”
The company adds that the southeastern U.S. is becoming a critical region for the lithium-ion battery supply chain as battery manufacturers and automotive original equipment manufacturers establish operations there. These facilities will generate significant quantities of battery manufacturing scrap and end-of-life batteries available for recycling, Li-Cycle says.
Univar Solutions Inc., headquartered in Downers Grove, Illinois, will be an anchor supply customer for the Alabama spoke, following Li-Cycle’s previously announced on-site partnership to provide Univar waste management solutions for electric vehicle (EV) and lithium-ion battery manufacturing.
Once completed, Li-Cycle’s Spoke 4 facility will have the capacity to recycle 5,000 metric tons of battery manufacturing scrap and end-of-life batteries annually, the company says, bringing its total North American recycling capacity to 25,000 metric tons annually.
Li-Cycle says it is developing the Tuscaloosa site, which is projected to begin operations by mid-2022 and to create roughly 30 new jobs, to accommodate a second 5,000-metric-ton processing line in the future. The black mass produced at the company’s spokes will be further processed at its hub in Rochester, where it will use a hydrometallurgical process to recycle the material.
“We have a responsibility to not only manufacture vehicles and batteries but to be good corporate citizens in the choices we make to protect our environment and the community around us,” says Michael Goebel, president and CEO, Mercedes-Benz US International Inc. (MBUSI), which is working together with Univar Solutions on end-of-life solutions for lithium-ion batteries. “We welcome the partnership between Univar Solutions and Li-Cycle and the strong commitment of our partners here in Tuscaloosa, Alabama, to push a sustainable future for mobility.”
“At Univar Solutions, we’re committed to bringing more sustainable solutions for a better world, leveraging our expertise to help our customers and suppliers make progress toward their sustainability goals,” Stephen Molica, vice president of services for Univar Solutions, says. “We are thrilled to work together with industry leaders like Li-Cycle and MBUSI to make a difference in lithium-ion battery recycling.”
Ron Davis, AAMA president, says, “Li-Cycle’s decision to locate in Alabama helps position our state on the leading edge as our industry enters the era of electric vehicle production. With its innovative technology and process, Li-Cycle is bringing a capability that will offer the auto industry a solution to what will become an issue of critical importance. I am very excited to see Li-Cycle’s groundbreaking contributions to our growing Alabama automotive industry.”
“With the popularity of electric vehicles accelerating, it’s critical that old batteries are recycled—and Li-Cycle’s technologies make that possible,” Alabama Gov. Kay Ivey says. “Li-Cycle’s selection of Tuscaloosa for its network of recycling facilities means not only jobs in Alabama but also a positive for the environment.”
Greg Canfield, secretary of the Alabama Department of Commerce, adds, “With EV production set to start in Alabama in 2022, Li-Cycle’s Tuscaloosa recycling facility will ensure that Alabama plays another important role in the life cycle of the batteries powering electric vehicles. This project addresses the battery repurposing proposition that must also be a part of the sustainability solution that EVs offer.”
A change of plans
Columns - Editor’s Letter
The Recycling Today Media Group has developed two webinar series to deliver the insights of its Paper & Plastics Recycling Conference and MRF Operations Forum.
The Recycling Today Media Group has been committed to delivering the industry’s leading conferences and events for more than 20 years. We take pride in the quality education and networking we’ve been able to deliver.
We had planned to host our MRF Operations Forum and Paper & Plastics Recycling Conference in person this October at the Marriott Marquis in downtown Chicago Oct. 19 and Oct. 20-21, respectively. This would have marked our first year at a new venue that was designed with events such as ours in mind. However, with the integrity of our events and the well-being of our attendees, speakers, exhibitors, sponsors and staff in mind, we made the difficult decision in mid-September to cancel these in-person events.
Regretfully, the imposition of corporate travel restrictions and increased concern about the spread of the COVID-19 delta variant create a situation where we know attendance and speaker availability will be affected. Given the importance of networking associated with these events, we felt their value would be significantly diminished had we gone forward with in-person events.
“We have developed two webinar series that still allow us to deliver the insights of our assembled panelists.”
While we are eager to connect with our industry once again, and we know many of you are as well, we are looking forward to doing so when we can safely deliver the same standard of events and networking you’ve grown accustomed to.
Given our decision to postpone these in-person meetings until 2022 and the positive feedback we’ve received about our agendas for these events, we have developed two webinar series that still allow us to deliver the insights of our assembled panelists. You can register for these sessions for free through the events’ websites, https://opsforum.recyclingtodayevents.com and http://paperplasticsna.recyclingtodayevents.com. View the sessions in real-time or when it’s convenient for you.
Recycling Today and its parent company, GIE Media, take pride in being nimble and responsive. Unfortunately, the evolving situation around COVID-19 necessitated that we employ this nimbleness to reimagine our events in a new format for 2021, but we think you’ll be happy with the results. Thank you to those of you who continue to support us as we navigate the complications presented by the pandemic.
DeAnne Toto
