Most of the world’s largest economies have fared well in 2017 and the first four months of 2018, bringing along with it stable-to-rising ferrous scrap prices during most of that stretch.

However, as recyclers and traders gathered in late May at the Ferrous Division meeting at the 2018 Bureau of International Recycling (BIR) World Recycling Convention & Exhibition in Barcelona, they heard from several panelists who pointed to potential trouble spots looming in the near-term future.

Ferrous Division Interim President Tom Bird of Hong Kong-based Chiho Environmental Group said trade disputes are heading down a path that could lead to $3 trillion worth of global trade “wiped out” by 2021, a notion that should concern recyclers with distant markets.

He also pointed to economic hiccups in Turkey as being “of concern" because that nation “is the biggest market for our ferrous scrap.”

Rolf Willeke, the Ferrous Division’s statistics advisor, confirmed Turkey’s status in a presentation offering highlights of the BIR’s updated “World Steel Recycling in Figures” pamphlet, which covers the years 2013 through 2017.

The nearly 21 million metric tons of ferrous scrap imported by Turkey’s electric arc furnace (EAF) steelmakers in 2017 made it by far the world’s leader in that category, followed by South Korea at slightly less than 6.2 million metric tons and India with more than 5.3 million metric tons.

The European Union (20 million metric tons) and the United States (15 million metric tons) exported the most ferrous scrap in 2017, Willeke pointed out. Both regions increased their ferrous scrap export volumes in 2017 compared with the year before, with U.S. volume growing by 17 percent and EU volume up by 12.9 percent.

So far in 2018, Division member George Adams of U.S.-based SA Recycling said ferrous scrap pricing and demand has been encouraging, “premised on healthy domestic demand for new steel [and] strength in the scrap steel export markets, although that strength has since faded.”

Adams referred to Taiwanese demand for U.S. scrap as a “roller coaster ride” so far in 2018, while the South Korean market has been “soft” and China is showing a greater ability to absorb its own ferrous scrap rather than rely on imports.

Adams and Frank Heukeshoven of Germany-based TSR Recycling GmbH pointed to economic concerns in Turkey, with Adams commenting, “New steel exports from Turkey decreased in the month of March by more than 15 percent, creating less demand for U.S. scrap.” Turkish steelmakers have been “hit hard” by the Section 232 tariffs on imported steel imposed by the Trump administration, according to Adams.

Heukeshoven referred to Turkey as “not doing well,” adding, “Sales [of ferrous scrap to Turkey] really slowed down in April [and] prices paid by the Turks are getting lower.” He said the “main drivers” for the gloomy conditions are “slow Turkish domestic rebar sales and the negative effect on [steel] export sales” caused by the U.S. tariff.

Guest speaker Jason Schenker of U.S.-based Prestige Economics pointed to potential damage from Trump administration tariffs as having the potential to spread far beyond Turkey. He expressed curiosity that boththe Federal Reserve Bank and the International Monetary Fund (IMF) have acknowledged this potential damage, but neither organization has revised its 2018 or 2019 gross domestic product (GDP) forecasts downward. “Tariffs are like cockroaches, there’s never just one,” Schenker warned.

For his part, Schenker forecasts between 2.0 and 2.5 percent GDP growth in the U.S. in 2018 but just 1.1 percent growth in 2019. He expressed concern about an angel investing “hype bubble” in the U.S. and beyond and market cap values for some tech companies reminiscent of previous bubbles.

In the manufacturing sector, Schenker said U.S. tariffs on imported steel and aluminum could lead to a short-term improvement in mill capacity rates, but ultimately as basic materials prices rise, many manufacturers could see their businesses erode, causing steel mill output to go back down.

Schenker also referred to this decade’s sustained economy growth cycle as having been fueled by auto sales, “but those are dropping” in 2018.

The 2018 BIR World Recycling Convention & Exhibition was at the Sofia Hotel in Barcelona, Spain, May 27-30.

The government of China’s sudden move to ban the importation of most types of plastic scrap remains the foremost factor in the health of the global plastic recycling sector, according to presenters at the Plastics Committee meeting of Brussels-based Bureau of International Recycling (BIR). The committee met in late May in Barcelona, Spain, at the 2018 BIR World Recycling Convention & Exhibition.

Committee member Dr. Steve Wong of Hong Kong-based Fukutomi Co. Ltd., who also helps lead the China Scrap Plastics Association, noted that China used to bring in as many as 7 million metric tons per year of plastic scrap, but that flow has been reduced to a trickle in 2017 and 2018.

The import ban has been enacted to boost China’s domestic recycling industry. Wong said China’s estimated 14 percent plastic recycling rate is low in part because just two percent of the nation’s postconsumer plastic packaging is estimated to be recycled.

Recyclers in other parts of the world have boosted their shipments to other Asian countries, including in Malaysia, Thailand and Vietnam, where many Chinese recycling entrepreneurs have shifted operations.

Wong said those nations would nonetheless be unable to absorb 7 million metric tons annually, and furthermore government in those nations are increasingly emulating China’s approach in scrutinizing such shipments. Wong said Malaysia’s government had stopped issuing approval permits for plastic scrap as of May 23, 2018.

Wong described the situations in Thailand and Vietnam as pointing toward similar strict outcomes, and that “Taiwan, Hong Kong and South Korea [are] about all that’s left,” but those nations do not have the capacity to accept great volumes.

Committee Chair Surendra Patawari Borad of Belgium-based Gemini Corp. said, “Indian imports will grow, but [from] a very small baseline figure.” He said annual imports of PET (polyethylene terephthalate) scrap into India have grown from 3,000 to 12,000 metric tons per month, but the “main stumbling block is the difficulty in getting import licenses” in India, where just 35 companies have such licenses, and no new ones have been issued since 2015.

Committee member Mahmoud Al-Sharif of United Arab Emirates-based Sharif Metals said the Middle East region is poised to attract more of the world’s recyclable plastic but, “There is a need for a change in approach with regard to scrap imports.”

Al-Sharif continued, “I believe the Middle East has a very good chance of making use of this opportunity. If this region can provide a long-term, predictable regulatory legal framework, I think there will be enormous investment from Europe, the United States, etc.”

As it stands in mid-2018, with the global plastic scrap trading market still far smaller than it was in 2016 and before, pricing in places like Europe and the U.S. remains depressed. Renaud Pfund of Paris-based Veolia said recycled-content LDPE (low-density polyethylene) pellet prices have “collapsed,” with some “low-grade LDPE” starting to go to landfills and waste-to-energy markets.

While China still accepts some reprocessed forms of recycled-content pellets, according to Pfund recyclers are having a hard time receiving approval of shipments not deemed to be “homogeneous in color, design and shape” by inspection authorities.

Borad, in reading a U.S. market report prepared in cooperation with Sally Haughton of U.S.-based Plastic Recycling Corp. of California (PRCC), said PET scrap exports from the U.S. dropped by 62 percent in the first quarter of 2018 compared to 2017, with those to China dropping by 86 percent.

Wong referred to the chain of events as leading to more “recycling at source” in the U.S., Europe and other nations that have a plastic scrap surplus.

Guest speaker Markus Panhauser of Hamburg-based freight forwarding firm Fr. Meyer’s Sohn, said that adding to existing woes of stranded shipping containers, plastic recyclers also must be wary of “mysterious people at the moment entering the shipping sector, trying to sell a digital product.”

Although Panhauser said container ships into Southeast Asian and Indian subcontinent ports had become “very full” in 2018 as those nations increased their scrap imports, he joined other speakers in warning that many of these nations are following China’s lead in terms of environmental legislation that could reduce that activity.

The committee also heard from guest speaker Vicente Olmos of Spain-based Sintac Recycling. Olmos said his plastic recycling company, like others, is reacting in a way that considers it “essential to recycle plastic at a local level.”

Olmos said the good news for recyclers in Europe is he sees a change in attitude toward recycled-content plastic products “from shame to pride.” He commented, “Before, we had to fight against a stigma. Now, everyone is publicizing the information.” Olmos said he also is encouraged by participation from virgin resin producers in the recycling sector. “We used to be competitors; now we are allies. We need each other.”  

The 2018 BIR World Recycling Convention & Exhibition was at the Sofia Hotel in Barcelona May 27-30.

China’s fast-changing policies have caused recyclers in Mexico to lose their access to pre-inspections in May 2018, while slow going on North American Free Trade Agreement (NAFTA) renegotiations between Mexico, Canada and the United States is creating another set of concerns.

Political turmoil was the foremost topic of discussion at the Latin America Committee meeting at the 2018 Bureau of International Recycling (BIR) World Recycling Convention & Exhibition, which took place in late May in Barcelona, Spain.

Committee Chairman Alejandro Jaramillo, of Mexico-based Glorem SC, said Mexico exports most of its yellow brass scrap to China, so when that nation’s government suddenly closed its CCIC inspection offices in the U.S. on May 4, 2018, it disrupted that sector of the market.

“It’s a big issue, and it gets underreported,” stated Jaramillo, who also called Mexico a “collateral victim” of the measure. According to Jaramillo and to Institute of Scrap Recycling Industries (ISRI) President Robin Wiener, while CCIC has an office in Mexico City, the necessary preinspection certificates for Mexican recyclers are issued from the Los Angeles office.

After that office closed, there were “metals on the water [heading to China] we had to divert,” said Jaramillo of the Mexican recycling industry. Some recyclers, he noted, “are keeping material on the ground” while waiting for more clarity on CCIC’s future in North America.

Recyclers in Central and South America have been less affected, according to Jaramillo and Nicolas Werba of Uruguay-based Werba SA, as they have been able to get pre-inspection certificates through a CCIC office in Argentina.

Jaramillo said major changes to NAFTA would “have a large impact on our industry,” concerning industrial scrap generation in northern Mexico and the free flow of scrap materials across the U.S.-Mexico border.

Wiener says ISRI has been “very clear” in its support of NAFTA, as have most industry trade organizations. Reports from Washington indicate there is “still a lot of work to be done” by NAFTA negotiators.

In an earlier BIR Convention presentation, Texas-based analyst Jason Schenker of Prestige Economics said just six of 30 chapters of the treaty have been updated and agreed to by the three nations. In the meantime, NAFTA negotiators are inching toward a July Mexican election that could greatly change that government’s composition and negotiating team.

The 2018 BIR World Recycling Convention & Exhibition was at the Sofia Hotel in Barcelona May 27-30.

Bales of old corrugated containers (OCC) caught fire Wednesday afternoon at a Royal Oak Recycling facility in Cleveland, a report by Cleveland.com says.

The fire started after 1 p.m. May 30 at Royal Oak Recycling on Industrial Lane near West 160th Street and Industrial Parkway in Cleveland, fire department spokesman Lt. Mike Norman told the news and information website.

Fire investigators say they think a piece of paper that became stuck in a forklift caught fire, the report says, causing the fire to spread to bales of OCC. Flames were mostly contained to the exterior of the Royal Oak Recycling building, and caused some damage inside the recycling center, Norman said, according to Cleveland.com.

“Water is causing the bales to collapse, so crews are using skid-steer loaders to sift through the debris,” according to the report, citing Norman.

He told Cleveland.com that temperatures near 85 degrees caused Cleveland EMS to transport two firefighters to area hospitals for treatment. A third firefighter was evaluated at the scene but cleared to return to duty, he said.

The fire was under control after 3:30 p.m., but firefighters were still working to fully extinguish the flames, Norman told Cleveland.com

Royal Oak Recycling, headquartered in Royal Oak, Michigan, is a commercial recycling company with locations across the Great Lakes and Midwest regions.