ISRI2019: Trading in for new challenges

ISRI2019: Trading in for new challenges

Tamara Lundgren of Schnitzer Steel Industries sees several new industry challenges elbowing out some of the previous ones.

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April 15, 2019

The scrap recycling industry has improved its image, but now it needs to convince younger members of the workforce that it’s a desirable place to be. That was part of an assessment on where the scrap industry stands as of 2019 by Tamara Lundgren, president and CEO of Portland, Oregon-based Schnitzer Steel Industries.

Lundgren spoke at the ISRI2019 convention, which took place in Los Angeles in April. She addressed global trade, workforce management and environmental issues in her presentation, which served as the focus of the Ferrous Spotlight session at ISRI2019.

The Schnitzer executive said the steel industry in the United States has benefitted “in the short term” from Trump administration Section 232 tariffs on imported steel, but said they were “an inadequate long-term solution.”

Lundgren said she instead favors the types of bilateral trade agreements the U.S. has recently worked out with Australia and South Korea. She also characterized the office of the U.S. Trade Representative (USTR) during the Trump administration as “very active,” adding, “this is good news” when it comes to agreements such as those with Australia and South Korea.

China’s policy to erect scrap barriers, meanwhile, has caused recycling operations to shift out of that nation and into other Asian countries while China’s government slowly finalizes its quality standards for imported scrap metal. “It behooves China” to publish these regulations, said Lundgren, as its recycling firms and metal producers “are losing market share.”

In a tight labor market, Lundgren said her company and the industry overall need to broaden the “talent search” to recruit new people while also exploring new technologies to automate jobs “no one is interested in doing.” She said operations positions can be filled by capable women, veterans and formerly incarcerated people, and also advocated for “open borders” needed in a tight labor market.

Lundgren said scrap recyclers are competing with distribution centers, warehouses and retailers for younger people entering the work force, and thus must provide work places that are “safer, cleaner and more attractive to work in.”

Lundgren said the scrap industry continues to fight against an outdated “junk yard” image even as the sustainability arguments in favor of recycling increase in the era of climate change. “Scrap is sustainable,” she stated, but also told attendees, “We need to run ethical companies admired for our integrity. We need to be our own best ambassadors.”

Electric vehicles, offered as another sustainability solution, will pose a challenge in the form of changes in scrap supply flows, said Lundgren. This will affect what flows into shredder yards, and also Schnitzer’s retail auto parts subsidiary. “Cars are getting more complex [and] more challenging for DIY [do it yourself]” mechanics, she commented.

ISRI2019, the annual convention of the Washington-based Institute of Scrap Recycling Industries (ISRI), was April 8-11 at the Los Angeles Convention Center in Los Angeles.