After declining throughout much of 2019, ferrous scrap prices increased by about $20 per ton on average in the U.S. in the November buying period and by another $30 per ton in the December buying period. Aluminum and copper scrap also made gains in pricing during December, with one source based in the Midwest saying she feels aluminum scrap pricing “found the bottom in November and started to turn a little” come December.

Metals processors and traders are hoping the pricing momentum carries into 2020.

Minimill steel producers have benefited from the lower ferrous scrap prices seen over the balance of 2019, as the article “The minimill cost advantage” in this issue notes. According to Ryan Smith of CRU Group, “Operating costs for flat-rolled minimill producers dropped in 2019 as weaker steel markets have pulled down metallics prices. This has meant that operating costs for minimills were in line with integrated producers in the United States throughout much of 2019.”

Smith does not expect that to remain the case in 2020, however, as he writes, “low scrap prices reduce U.S. domestic scrap supply, and the growing minimill sector has an increasing appetite for scrap.”

U.S. scrap yard operators were pointing to less traffic across their scales in the last quarter of 2019. Despite the gains in pricing in the last two months of the year, a shredder operator based in the Southeast says intakes remained low as of December. “We have lost about 35 percent of our volume.”

Lower steel prices overall have affected minimills’ profitability in the last quarter of 2019. In its earnings guidance for that quarter, Nucor Corp., Charlotte, North Carolina, says it expects the performance of its steel mills segment to decrease compared with the third quarter of 2019 as lower steel prices at the end of the third quarter affected fourth-quarter results.

“Metals processors and traders are hoping the pricing momentum carries into 2020.”

“During the fourth quarter, domestic scrap metal prices have risen markedly and our sheet, plate, structural and bar mills have all implemented price increases,” the company says. “We believe this reflects healthy underlying demand for our steel mill products. We expect that the performance of our steel mills segment will improve as we head into 2020.”

Fort Wayne, Indiana-based electric arc furnace steelmaker Steel Dynamics Inc. also predicted lower profitability for the fourth quarter of 2019 relative to its sequential third-quarter results because of two planned outages, seasonally lower shipments and margin compression as average steel prices declined more than scrap costs.

The company adds that underlying domestic steel demand remains principally intact for the primary steel consuming sectors and that customers have been positive concerning the business outlook for 2020.

Scrap recyclers and steel producers are hoping that positivity remains as 2020 progresses.

Scrap recyclers rightfully can pat themselves on the back for their abilities to adjust to new circumstances and to seek out new markets when old ones begin to fade. In recent months, ferrous scrap traders have encountered several circumstances that have caused them to deploy these talents.

China’s government has severely disrupted global nonferrous scrap trade, in addition to global markets for scrap paper and scrap plastic. Its restrictions on imported scrap include several ferrous grades. This, combined with a massive boost in its own steel scrap reservoir and tariffs, caused its ferrous scrap imports to dwindle in 2019.

Turkish mills—by volume the largest importer of ferrous scrap from the U.S.—have struggled to retain their output, causing them to spend occasional stretches on the scrap purchasing sidelines.

Fortunately for scrap processors in the United States, a life raft full of developing nations has emerged to keep pace with or increase their annual buying volumes, keeping the spigot open for outbound ferrous grades.

A subcontinent’s substantial appetite

On the Indian subcontinent, steelmakers in India, Bangladesh and Pakistan have added significant new capacity because of an infrastructure-fueled boom. This likely will result in needing more imported scrap as feedstock for the next several years.

Presenters at India-based SteelMint’s 4th Steel Scrap, Billet & DRI Trade Summit, held in August 2019 in Bangkok, said foreign direct investment from around the world is boosting the need for steel in those nations, with producers responding by adding capacity. Much of that new capacity, they noted, is coming in the form of scrap-fed electric arc furnace (EAF) or induction furnace production.

Sanjoy Ghosh, senior manager of supply chain management at Bangladesh-based steelmaker BSRM, said the “40 active mills” producing steel in his nation imported 19 percent more ferrous scrap in the first half of 2019 compared with 2018.

Ghosh said, thanks to its status “among the five fastest growing economies in the world,” Bangladesh is likely to see its steel consumption rise from 45 kilograms (99 pounds) per person in 2018 to 73 kilograms (161 pounds) per person in 2022.

Gross domestic product growth of some 8 percent annually has led Bangladesh’s steel output to grow 37.5 percent per year recently, he added. Some of the 8 million metric tons of steel produced annually in Bangladesh is heading toward “a lot of infrastructure work,” Ghosh said.

Photo courtesy of SteelMint Group

The U.S. is the largest ferrous scrap supplier to Bangladesh, he said, followed by the United Kingdom, South Africa, Australia and Singapore.

Shipbreaking provides another source of ferrous scrap and used steel, Ghosh added, with the number of vessels scrapped in Bangladesh rising 36 percent in the most recent fiscal year (from 196 ships to 255 ships). Singapore, Japan and South Korea are the largest providers of obsolete ships to the nation.

Economic cooperation with China has provided much of the boost in Pakistan, according to a video presentation provided by Fahad Javaid of Pakistan-based Mughal Iron & Steel Industries Ltd. That nation currently has some 350 mills with 6 million tons of annual capacity, with many of these mills of the smaller, scrap-fed induction furnace variety.

Scrap imported to Pakistan “has positive prospects,” Javaid said, describing Pakistan’s ferrous scrap supplies as “limited.” He estimated that 80 percent of the ferrous scrap consumed in the country is imported, with import volumes having risen 24 percent in 2017 and 38 percent in 2018.

Ongoing infrastructure projects stemming from cooperation with China’s government, combined with a new housing policy in Pakistan, help provide “the backbone of the country’s economy and have increased steel demand” in Pakistan, Javaid said. His message to overseas scrap suppliers was “to keep Pakistan on your radar.”

In India, the national Ministry of Steel policy has set ambitious targets for steel production and ferrous scrap recycling activity. Vijay Arora of Mumbai-based Mahindra Group Accelo gave an overview of that company’s efforts to collect and recycle end-of-life vehicles (ELVs) to help make progress toward both goals.

Arora said the effort has been challenging in part because older vehicles tend to meet their end not in large cities but scattered widely in the Indian countryside. Mahindra and other companies are being encouraged to build ELV collection centers and shredders in large cities, but even obsolete vehicles there can be difficult to collect, he said, because an unregulated, informal sector can pay more for them.

Efforts to recycle more ELVs tie into a need for more scrap, with India having consumed some 16.8 million metric tons of ferrous scrap in 2017. That figure is expected to rise to 22.3 million metric tons in 2023 and (if Ministry of Steel goals are met) to some 40 million metric tons by 2030.

Arora said about 4.38 million metric tons of ferrous scrap were imported into India in 2017, with that figure potentially rising to 7.23 million metric tons by 2023. India’s Ministry of Steel, however, has stated it would like India to be self-sufficient for ferrous scrap by 2030, despite the fast-rising need.

An analysis by Kedar Joshi of SteelMint showed that 54 percent of India’s 112 million metric tons of current annual steel output is produced by basic oxygen furnaces, but scrap-fed electric arc furnaces (24 percent) and induction furnaces (22 percent) combined produce nearly half of that amount.

The United Arab Emirates, the leading ferrous scrap supplier to India, sends only containerized shipments. However, the United States, India’s second-largest supplier, sends 48 percent of the bulk ferrous scrap shipments booked into India. Also supplying scrap to the nation are the United Kingdom, Australia and the Netherlands.

Uneven prospects in the ASEAN region

At the same event, insight into the growing steel industry and ferrous scrap trade in the ASEAN (Association of Southeast Asian Nations) region revealed that some Southeast Asian nations, such as Vietnam, are adding scrap-melting capacity, while other nations in the region are importing more finished steel. The ASEAN region consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Pichsini Tepa-Apirak of Malaysia-based South East Asia Iron & Steel Institute (SEAISI) said Vietnam has been the rising steel consumption and production star in that region. The nation was the sixth-largest per capita consumer of steel in the ASEAN region in the 1990s but now ranks first.

As of 2018, Vietnam produces 45 percent of the steel made in the ASEAN region, far ahead of Thailand (19 percent) and Indonesia (18 percent). The remainder of crude steel or foundry iron produced comes from Malaysia (12 percent), the Philippines (4 percent) and Singapore (2 percent).

Photo courtesy of SteelMint Group

EAFs provide much of the region’s steelmaking capacity, with Tepa-Apirak referring to such production as “mostly scrap-based.” SEAISI estimated the region’s domestic ferrous scrap supply at 20.3 million metric tons in 2018, prompting ASEAN steelmakers to import some 10.4 million metric tons of scrap that year.

Vietnam and Indonesia are the largest scrap importers, with the United States and Japan acting as the largest scrap suppliers to the ASEAN region, he said.

While additional steelmaking capacity is being added throughout the region, particularly in Vietnam and Indonesia, Tepa-Apirak said several other ASEAN nations (including Thailand and the Philippines) seem content to import sizable amounts of finished steel and semifinished billets.

Rajiv Mangal, president and CEO of Tata Steel Thailand, said that nation has banned the installation of new steel rebar production capacity for the next five years, in part because its current mills are struggling with low capacity utilization.

The demand for steel in construction applications in Thailand dropped by 9 percent in the first half of 2019, Mangal said, but momentum could shift if several planned infrastructure projects begin in 2020. “I feel past 2020, we should see a boost in steel demand from Thailand,” he said.

R.S. (Raj) Vaidhyanathan of the United Arab Emirates-based scrap trading firm Indicaa Group Ltd. said the growing flow of ferrous scrap into the ASEAN region and the Indian subcontinent is prompting the question of when and how a new benchmark ferrous scrap export price would be established. Currently, prices to the largest global scrap importer, Turkey, most often serve as the benchmark prices.

Vaidhyanathan said Asian nations combined are now involved in 33.1 million metric tons of ferrous scrap trading, surpassing Turkey’s 20.7 million metric tons of activity.

However, that 33 million metric tons of trading is divided among several nations, including Vietnam in the ASEAN region as well as India and Pakistan on the Indian subcontinent and South Korea and Japan in East Asia.

That division makes finding an individual nation to replace Turkey as a “benchmark setter” difficult, Vaidhyanathan said. However, he pointed to Bangladesh and to Vietnam—which accept break-bulk and containerized scrap cargoes—as nations to watch.

No matter where the index setters look for guidance, the overall trend of ferrous scrap heading into Southeast Asia and the Indian subcontinent in South Asia seems poised to last for several more years.

The author is senior editor with the Recycling Today Media Group and can be contacted at btaylor@gie.net.

Today’s scrap metal recycling facilities face multiple headwinds along the road to profitability. Market closures because of tightening purity standards plus underdeveloped domestic recycling infrastructure have led to an abundance of scrap metal remaining in processors’ yards.

Material surpluses have driven down prices for scrap metals. Since China implemented National Sword, “prices for general mixed metal products like zorba have fallen,” says Eric Thurston, sales manager, metals, for Tomra Sorting Inc., with North American operations headquartered in Charlotte, North Carolina.

Brian Gist, global sales director for Tomra Sorting, adds, “As a result, we are seeing a trend toward recycling facilities using advanced sorting techniques with sensor-based sorting to separate mixed materials into monofractions.”

While the headwinds are strong, some recycling companies see the new stringent quality standards as a way to separate themselves from other suppliers. This will, however, require upgrades to processing equipment.

“Some customers are telling us that market conditions are right to upgrade their plants for processing the abundance of scrap metal available in North America to higher purity standards,” says Carlos Manchado Atienza, Americas regional director for Tomra Sorting.

When it comes to sorting metal fractions, a company can select from wet or dry sorting technology.

Density sorting

Dense media, or wet sorting, has been used by the scrap industry for decades to sort heavy metal fractions, such as copper, zinc and stainless steel, from light metal fractions, such as aluminum. The process is a carryover from the mining industry, where it was used to recover precious metals and coal fractions from tailings. At the surface, using water and a flocculant to float/sink the materials seems simple enough.

Initial capital outlays to build a wet plant can be attractive to some scrap metal companies. A wet plant costs less to start up compared with a dry sorting plant. However, this upfront savings can come at a long-term price. “Ferrosilicon costs can vary, ranging from $1,600 to $1,900 per ton at any given time,” Thurston says.

Gist, who spent years operating a dense media plant, says a well-run plant uses ferrosilicon at a rate of approximately 5.5 to 6.5 pounds per ton of metal sorted. “However, the average plant uses roughly 17.5 to 20 pounds per ton of fine metals fraction separated,” he says.

Ferrosilicon creates the specific gravity (SG) ranges needed to sort metals into light and heavy products. The goal is to maintain an SG ranging from 1.8 to 2.2 for floating light material and an SG ranging from 2.8 to 3.4 for the heavy product. Multiple factors influence the targeted SG values, including the material being processed and the water quality. “Stability is a constant battle in running a dense media plant, making it difficult to obtain stability and repeatability in sorting,” Gist says. “As material is floated, fine material settles in the water, and the dirtier the water, the more ferrosilicon required to get the correct specific gravity for sorting the light or heavy package.”

Thurston and Gist caution scrap metal recycling facilities that are considering investing in a wet plant to remember the sorting limitations, especially in today’s market. Floatation will produce only light (aluminum) and heavy packages. Unless combined with a dry sorting circuit, wet plants cannot further sort the heavy metals into monofractions of copper, zinc, stainless steel or lead, which limits the plant’s flexibility to adapt to market conditions.

The average dense media plant is configured to process up to 20 tons per hour (tph) of metal. SG stability and recycled particle size affect this rate. As SG instability occurs and particle sizes get smaller, production rates can slow, often to as low as 7 tph.

Dirt caught in the pores of scrap metal mixes with ferrosilicon and settles in the tanks, on the screens and in lines and pumps. This filter cake must be cleared from the system, and depending on the plant’s geographic location, it could be classified as hazardous waste, which makes disposal more difficult and costlier. These items, plus the need to keep the tanks and lines from freezing during the winter in many regions, can result in continuous care and significant long-term operating costs for dense media plants. Operations must figure these costs into the equation when considering the type of sorting process they will employ to separate metal fractions.

Advanced sensor-based sorting

While newer to the market than wet sorting, metal recycling facilities have used dry sensor-based sorting for nearly three decades. “We began selling our optical sorting equipment in North America in the early 1990s,” says Manchado Atienza.

In addition to optical sorters, the metal recycling industry also employs X-ray, electromagnetic and laser technologies to sort impurities from ferrous and nonferrous metal fractions. Rather than water, short bursts of air are used to either eject detected impurities, dropping the desired product in a negative sort, or eject the product and drop the impurities in a positive sort.

Whereas wet sorting provides simply a light or heavy product package, a dry system takes the sorting process a step further, producing monofractions. “Advanced optical sorting further separates the copper, nickel, stainless steel, lead and other metals from mixed metals, like zorba, to deliver a higher quality aluminum product as well as other monofractional products,” Manchado Atienza says.

In a market where mixed metals are selling at a low price, dry sorting gives companies the flexibility to adapt to market conditions, changing their sorting processes to separate the more valuable fractions to meet market demands.

Changes to the sorting circuit are made through the equipment’s control software package. Tomra recently introduced its ACT operating system that allows operators to make product package sorting adjustments using a touch screen. “It takes an operator less than two weeks to learn how to run a dry plant,” Thurston says, “but running a wet plant is more of an art form and can take up to 18 months for an operator to run it at peak efficiency.”

Gist explains it’s a struggle to learn how to optimize SG in a wet plant to achieve maximum product recovery at a low flocculant usage rate. “If you have a good operator of a dense media plant, you need to retain him as he will save the company on operating costs,” he says. “Whereas with optical sorters, the software program offers consistent and repeatable results at the touch of the screen, so it’s easier for the operator to learn and run.”

Gist adds that wet plant operators often are tied to the facility to keep a close eye on the floatation process. New technology available to the market for dry sorting systems uses the cloud to report critical operating data to companies using optical sorters, so the sorting circuit can be operated remotely, if desired.

Some metal recycling facilities point to the higher initial capital expenditure as a disadvantage of the dry sorting process. Thurston says long-term operating costs for running optical sorters are substantially less than operating dense media.

“Operating costs are up to 90 percent lower with dry sorting,” he says, “and that’s one reason why a large Midwest metal recycling operation sold off its dense media plant in favor of a dry process. Plus, the uptime availability for optical sorters is around 95 percent verses approximately 75 percent with a dense media plant.”

Historically, sorting fine metal fractions of less than 0.4 inches is where wet separation held a distinct advantage because the resolution of optical sorting equipment was effective for fractions sized 0.4 inches and larger. Recent advancements in technology have led to the introduction of the Tomra X-tract X6 Fines package for its X-ray sorting technology.

“This package now allows us to effectively detect and sort fine metal fractions about 50 percent smaller than what was previously available to the market while offering recovery rates of 95 percent and higher,” Thurston says.

The right mix

Thurston offers a suggestion to companies that operate dense media plants that want the flexibility of separating heavy mixed metals into monofractions: adding sensor- based sorting. Different types of dry sorting technologies can be added to the density sorting process—either before or after the wet sort.

“Unlike a wet plant, dry sorting technology is scalable to meet the operation’s needs,” Thurston says. “A dry sorting line can be cost effectively added to the back end of the process to sort monofractions, allowing a company to take advantage of market conditions.”

Whether employing wet or dry separation for metal fractions, Gist says final product purity must be paramount. “China’s implementation of National Sword and the many Southeast Asian markets following suit is an indicator that purity standards will only get more stringent. Therefore, a recycling operation must choose the right technology that will offer not only the product the company needs to sell to the market but also at the right purity levels.”

Rick Zettler is the owner of Cedar Rapids, Iowa-based marketing communications firm Z-Comm and can be contacted at zcomm@mchsi.com. He submitted this article on behalf of Tomra Sorting Inc., with North American operations headquartered in Charlotte, North Carolina. More information is available at www.tomra.com/en/sorting/recycling.

Changes to China’s scrap import policies have reduced outlets for zorba, leading auto shredder operators in the U.S. to look for alternative options for the zorba they generate. For some, that has meant investing in equipment to further sort this material. Although traditional eddy current separators are effective at sorting nonferrous metals from nonmetallic materials, these machines fall short when trying to sort nonferrous metals from one another. This means recyclers have had to invest in sensor-based sorting technology or sink-float technology to further refine this material.

However, a team of researchers at the University of Utah, Salt Lake City, and EDX Magnetics LLC, a company associated with the research team at the University of Utah, have been working to remedy metals sorting challenges using high-frequency electromagnets and a new form of eddy current sorter employing electrodynamic sorting (EDX). The research was led by Raj Rajamani, who is a professor of metallurgical engineering at the University of Utah. Research associates for this project included James Nagel, Dave Cohrs and Jacob Salgado.

One issue the researchers aimed to solve was recovering aluminum from zorba. The widespread use of eddy current separators among auto shredders operators means they have a tendency to produce relatively similar mixtures, Nagel says. One of the more common products produced by auto shredders is zorba, which is loosely defined as any combination of nonferrous scrap metals that is predominantly aluminum. However, zorba can be a tough grade to sort further, Nagel says.

A grant from the Reducing EMbodied-Energy And Decreasing Emissions (REMADE) Institute, West Henrietta, New York, helped the team of researchers construct a high-throughput electrodynamic sorter that can process zorba at a rate of about 1 ton per hour.

With the electrodynamic sorter, as lightweight aluminum particles pass through a magnetic field, electrical eddy currents are induced and the particles are propelled over a mechanical divider. The aluminum is recovered from the rest of the zorba, producing a clean, high- purity aluminum that can be sold directly to a smelter, says Nagel, who also is a co-founder of EDX Magnetics.

“This machine works well at upgrading zorba,” he says. “We have a very good machine that works on fine zorba—zorba in the ¼-inch-to-1-inch size range. It’s very good at getting aluminum out of that material with high purity. You can also upgrade your zorba to twitch. It also upgrades the drops of your copper concentrates, so you can get more value out of that.”

Exciting technology

Rajamani first began researching magnets and eddy currents about a decade ago with hopes of developing an electrodynamic sorter. About five to six years ago, he submitted a proposal to develop an electrodynamic sorter to the Advanced Research Projects Agency-Energy (ARPA-E), which funded the basic research.

Nagel says Rajamani and his team partnered with the REMADE Institute to scale the technology and make it more practical for use in scrap metal recycling.

Photo: EDX Magnetics LLC

Nagel adds that while the concept of EDX has been around for decades, EDX Magnetics’ machine is the first embodiment that “really works” to sort nonferrous metals.

EDX Magnetics’ electrodynamic sorter operates similarly to a traditional eddy current separator, Nagel says. The main difference is that eddy current separators are mechanical and feature a rotating cylinder, whereas the electrodynamic sorting machine features a nonmoving electrically excited field.

“The traditional eddy current is physically moving a permanent magnet,” he says. “You have to mechanically move the magnet near the metallic object in order to excite the eddy current. We have an electromagnet, so it’s magnetic material that you excite with an electrical current, and that creates a magnetic field. There’s nothing moving. It’s a solid block with an electrical current exciting it.”

Nagel says the key principle with EDX technology is the high frequency of excitation that allows users to sort nonferrous metals from other nonferrous metals.

EDX Magnetics’ electrodynamic sorting system begins with a vibratory feeder that distributes scrap material onto a conveyor belt. Embedded within the conveyor assembly is an electromagnet core that is excited by an alternating electrical current. The tips of the electromagnet are placed in direct contact with the underside of the conveyor belt so that scrap particles can pass directly through the magnetic field overhead.

Depending on factors such as electrical conductivity, mass density and physical geometry, some of the particles will repel up and away from the magnet. These particles are referred to as “throws.” Any particles that pass through the field without significant deflection are referred to as “drops.” A mechanical splitter separates the throws from the drops, which collect in corresponding bins.

Because of the excessive heat that builds up in the electromagnets, an axial flow fan is used to circulate air through the cores to maintain a stable temperature. Nagel says the EDX technology also serves as an alternative to density separation technologies.

“[Density separation technology] exists and people are using it, but it’s expensive,” he says. “There is a huge processing cost with it—you may need to clean and dry materials. There are regulatory hurdles [to that model] as well. All these factors come together to determine whether that technology is viable or not.”

Prepping to go to market

Lab testing on the technology was completed between February 2018 and November 2019, and Nagel says EDX Magnetics is almost in a position to sell the electrodynamic sorter commercially. But first, he says, the researchers need to test the machine in a scrap yard setting for a few months. Once the researchers know the machine can operate for three-to-four months in a scrap yard with no major failures, Nagel says EDX Magnetics will be ready to start taking orders.

He adds that the machine’s cost will be on par with that of a traditional eddy current separator. However, Nagel explains, this technology isn’t meant to replace eddy current separators; it supplements them by providing a better sort. “Most eddy currents, they’re very good at getting metal out of nonmetal, but they aren’t very good at sorting metal after the fact,” he says. “This machine would come after a traditional eddy current.”

Based on the lab testing, Nagel adds that the electrodynamic sorter can comfortably sort zorba at a rate of about 1 ton per hour. It can be pushed to about 1.5 tons per hour, but he says “that is the upward limit of pushing material through.”

This technology offers other advantages in nonferrous sorting, Nagel adds. One benefit is that the machine can sort particles that are as small as 1 millimeter. The sorter requires only 4-to-5 kilowatts of power to operate. Also, the machine operates efficiently in warm and cold climates alike, but it achieves even better results in cold temperatures, he says.

Nagel adds that the electrodynamic sorter can be targeted to process other grades of nonferrous metals beyond zorba, as well. “This technology can be applied to other materials; just focus it on the greatest need.”

The author is managing editor of Recycling Today and can be reached at msmalley@gie.net.