Associations weigh in on EPA recycling strategy

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She also writes, “Recyclable materials (often referred to as ‘scrap’ by the recycling industry) are not waste. They are raw materials processed by recyclers to a specification grade and valued by manufacturers for their cost, energy and environmental savings.”

ISRI also advises the EPA to pay greater attention to municipal recycling program contamination rates, processing efficiency and the bolstering of end markets for some collected materials.

A press release co-signed by 11 plastic-related trade groups did not offer detailed feedback. The coalition of groups, calling themselves the Plastics Association Leaders Group (PAL), writes, “We applaud the EPA for taking up this process to establish a national recycling strategy for the 21st century to ensure more recyclable materials are collected, processed and manufactured into new products. Our industry looks forward to being a valued partner and lending our expertise to support this ambitious goal.”

The Plastics Industry Association, the Plastics Division of the American Chemistry Council and the Vinyl Institute are trade associations listed as being part of PAL.

The Arlington, Virginia-based National Waste & Recycling Association (NWRA) has expressed concern that the methods identified by EPA to reach its goals might not be sufficient and has offered recommendations it says can “help ensure EPA meets the recycling goals.”

NWRA has recommended the EPA establish a goal of 30 percent recycled content by 2025 for plastic (rather than the drafted 50 percent by 2030), and that beyond plastic, EPA “work with trade associations to establish content goals for glass, paper and metal.”

Welcome to the inaugural issue of Scrap Recycling. Since 1963 Recycling Today has covered the metals recycling business, and we fully intend to continue that coverage. However, we’ve introduced this supplement because the scrap business is going through a tremendous period of change.

When I entered the scrap industry some 30 years ago by working for Recycling Today, it was very different than today. One of those differences was that scrap processors—especially in the nonferrous sector—often produced highly specialized metal packages for their consumers.

While some of that remains, much of it was washed away by the rise of China. In the early 1990s, scrap buyers from China began purchasing material in small quantities. Over the following 20-odd years, that buying ramped up in dramatic form. As it did, many quality standards declined.

I recall the story of a heavy media plant operator who sold a load to one such buyer. After they negotiated the deal, the final request from the Chinese buyer—to the amazement of the processor—was that the very clean, separated grades be mixed together as the containers were loaded! The cost to separate the material in China was far less than the import duty savings.

Today, this has all changed. Green Fence and the range of other Chinese programs designed to restrict the importation of waste have created a ripple effect. China wants only clean raw materials, what some call “furnace ready” in the metals world. Other nations also have followed China’s lead.

“Green Fence and the range of other Chinese programs designed to restrict the importation of waste have created a ripple effect.”

This means the scrap processing industry is having to shift once again. Producing metal grades to exacting specifications is becoming the norm yet another time. Getting there, however, is a challenge.

Of course, the growth and evolution of the Chinese market have not occurred in a vacuum. Other nations also have developed a thirst for North American scrap. Steel mills in places like Turkey, for example, have come to rely upon our ferrous scrap.

Parallel to the shifts in materials demand have been tremendous advancements in equipment technology. Shredders have advanced. Wire chopping lines have advanced. Downstream sorting equipment has advanced. Shears and balers have advanced.

Scrap Recycling will look at all these topics.

Published in collaboration with the team at Davis Index, the publication will examine material pricing trends and flows, the technology available to meet stringent specifications, melt shop requirements and so much more.

We hope that you enjoy the first issue. Subsequent issues will come in June and October of 2021. We welcome your feedback and any story ideas you might like to offer.

Demand for aluminum has risen steadily over recent years and is predicted to increase further over the next two decades, with the automotive and construction industries likely to remain major end users of this highly versatile metal.

In the automotive industry, the need to lightweight vehicles is driving up demand for aluminum, in particular wrought aluminum alloys for use in electric vehicles as the industry shifts away from internal combustion engines that use cast alloys.

In Europe, the continent’s construction industry is under growing pressure to reduce its CO2 emissions and become more energy efficient. Therefore, demand for aluminum also is likely to rise because it is a lightweight, energy-efficient and infinitely recyclable material.

We’ve already witnessed European plastics manufacturers committing to increase the amount of recycled content in their products to reduce their carbon footprints, and now we’re seeing the same thing happen in the aluminum industry. Aluminum producers are marketing high-recycled-content aluminum to demonstrate their environmental credentials and their commitment to reducing CO2 emissions. (See “Aluminum charts a green course” in this issue.)

To meet the demand for high-quality recycled aluminum, the challenge for scrap metal processors, along with the growing number of aluminum producers that are investing in equipment to sort scrap themselves, is how to produce a consistently high-quality, high-purity furnace-ready aluminum product. To achieve this and to optimize the use of scrap in their furnaces, the infeed material needs to be cleaned of heavy metals, aluminum-plastic compounds and other light material, such as magnesium. Being able to rely on a repeatable-quality furnace material is key for the aluminum industry.

Targeting contaminants

One of the major sources of aluminum scrap is zorba, a mixed nonferrous material generated by passing shredded end-of-life vehicles, appliances and electronics under eddy-current separators. Zorba consists primarily of aluminum (typically 70 percent to 80 percent) and other nonferrous metals, such as copper, brass, zinc and magnesium.

Additionally, zorba can contain nonmetallic contaminants, such as rubber and plastics. In Europe, magnesium makes up from 1 percent to 2 percent of a typical aluminum scrap fraction and is regarded as an unwanted contaminant in the scrap mix, whereas the United States generates an estimated 4 million tons of zorba annually, which typically contains from 2 percent to 4 percent magnesium.

Similarly, the increasing volume of aluminum-plastic compounds and other plastics and nonmetallic materials in zorba can make it difficult for processors to produce high-purity aluminum scrap. Historically, the magnesium and the aluminum-plastic compounds would end up in the aluminum fraction, reducing the quality of the aluminum product and, subsequently, reducing its market value.

Until two years ago, processors could sell this lower quality material to China, but since China closed its borders to this material, it has become increasingly difficult to sell zorba that has not been cleaned. Consequently, a surplus of zorba exists in Europe and the United States. With an excess amount of zorba sitting in yards across Europe and the U.S., the issue of quality becomes even more significant. Selling the material without cleaning it simply isn’t a sustainable solution, especially if processors want to get a good price for the material. Only those recyclers who can process the material and recover a consistently high-quality aluminum product will be able to sell it to end customers in domestic markets.

Because magnesium and aluminum are similar in density, traditional sink-float dense media plants can struggle to clearly differentiate between these materials to separate them and remove contaminants. The aluminum recovered using a sink-float separation process risks being unable to meet the quality standards required by end customers, and, as a result, processors could face penalties for supplying an inferior quality product.

Photo by Marko Sowitzki

Making the most of technology

Removing aluminum-plastic compounds, light plastics and magnesium from aluminum scrap requires advanced sorting technology. One such technology that addresses this challenge and offers a reliable, robust and cost-effective alternative to sink-float separation is the latest application Tomra Sorting has developed for its X-Tract unit.

During test center and in-field testing, Tomra put hundreds of metric tons of sorted and traded material through the X-Tract unit with the belt running at 10 feet (3 meters) per second and achieved consistently high purity rates of up to 99 percent. This means the material can be traded more robustly and used in domestic or close-to-home markets.

The system uses existing Tomra XRT (X-ray technology) but in a new configuration so it is capable of sorting materials of different densities. It can separate light materials, aluminum-plastic compounds and magnesium from aluminum to create furnace-ready products, including what’s referred to as low-magnesium twitch, across the zorba size spectrum that ranges from 0.2 inches to roughly 4.7 inches (5 millimeters to 120 millimeters). This degree of fines separation can be difficult to achieve using dense media plant processes and, until now, it wouldn’t even have been possible using Tomra’s sensor-based sorting technology because magnesium is very similar in density to aluminum so the technology couldn’t recognize the difference between the materials.

Now, though, the capabilities and combination of the X-ray technology used in Tomra’s X-Tract unit can make it a consistently accurate solution.

Tomra test centers in Germany and the United States have achieved consistently high purity rates of 99 percent recycled aluminum, meeting the requirements of end customers that specify magnesium-free aluminum, or typically well below 0.5 percent by weight.

Being able to produce up to 99 percent recycled aluminum can enhance the market opportunities for processors that can sell their furnace-ready products, including low-magnesium twitch, across the full size spectrum to secondary aluminum smelters within their own countries or to customers in other developed countries. And with the quality and purity of the material guaranteed to be consistent, processors can establish long-term, reliable sales channels within Europe or the United States, with no penalties for missing quality requirements.

The ideal circular economy solution would be for scrap material to be used in the same country where the new products are manufactured, effectively closing the loop on aluminum recycling.

The capabilities of the technology aren’t limited to removing aluminum-plastic compounds and magnesium. It also is capable of sorting wrought aluminum (sheet) from cast aluminum (alloys).

Wrought aluminum is low density, while cast is higher density, so the magnesium and aluminum-plastic compounds end up in the wrought stream. With this technology, Tomra can remove the magnesium and aluminum-plastic compounds from the wrought aluminum.

Tomra will continue to explore other tailored metal applications for this X-ray-based technology.

This article was submitted by Germany-based Tomra Sorting Recycling, which is part of Tomra Sorting Solutions, a developer of sensor-based systems for the food, mining and other industries. Tomra Sorting is owned by Norwegian company Tomra Systems ASA. More information is available at www.tomra.com/recycling.

Electric arc furnace- (EAF-) based steel production in the United States could increase from 70 percent of overall production as of late 2020 to 85 percent by 2025, according to estimates from the Steel Manufacturers Association, Washington. This growing EAF output would increase ferrous scrap demand and competition for volumes throughout the U.S. This, in turn, will change domestic scrap flows and scrap import and export trends.

Texas is becoming an increasingly attractive destination for steelmakers looking to set up EAFs. Over the past few years, three new EAF mills—Big River Steel (BRS), JSW Baytown and Steel Dynamics Inc. (SDI)—have announced expansion plans in the state, thereby increasing the need for scrap in the region. How will these EAFs meet their raw material needs?

A general market consensus points toward inflows through all modes of transportation, including barge or vessels, rail and trucks. Moreover, new scrap demand in the South could distort flows all the way to the Mississippi.

Freight costs are an essential factor in scrap procurement, and market participants note that water and rail access are preferred delivery forms mill consider when they select a site for making steel. Texas, because of its location, ticks most of these boxes. Market participants also say that transporting via rail over longer distances, imports of prime grades from Europe and barge loads of scrap sourced from along the East Coast also could be more economical for steelmakers in the region compared with truckloads sourced from closer suppliers.

Koch Metallics, BRS’ exclusive procurement agent, says it expects some of the additional scrap to come from material reshuffled from the basic oxygen furnace closures in the region. Companies like OmniSource, SDI’s scrap processing division, and Koch are proceeding with strategic scrap sourcing arrangements. Lynn White, commercial development manager at Koch, says her company is “leveraging its extensive experience in materials handling and transportation to reduce raw materials costs while seeking alternative supplies of raw materials.”

Koch Metallics also plans to maximize access to other Koch Group entities and their vast contact base to access scrap sources that include demolition projects and end-of-life assets.

Ore-based metallic scrap alternatives, such as hot briquetted iron (HBI), direct-reduced iron and merchant pig iron, also could be part of the raw materials mix for new EAFs, easing reliance on scrap. As a result, Voestalpine’s HBI plant in Texas and Cleveland-Cliffs’ HBI facility in Ohio could play larger roles in satisfying the raw material needs of EAF mills.

Greater metal recovery yields will add to total scrap supplies with ongoing technology investments at scrap processors. Portland, Oregon-headquartered Schnitzer Steel Industries, for example, is making capital investments to achieve greater metal recovery yields. The steelmaker’s export customers accounted for 65 percent of its total ferrous sales volumes in the fourth quarter of 2020, thereby, making Schnitzer a potential source for domestic feedstock.

Continued emphasis on recycling programs and landfill diversion also could increase national scrap supplies. 

But the question remains: How will these trends affect the need for scrap in Texas and its surrounding areas?

SDI: An immediate impact

Of the three EAF mills planned for Texas, SDI has the closest start date at mid-2021. Regional dealers are hearing of small purchases starting in December 2020 to test logistics and a buildup of inventories in the spring. The upcoming 3-million-ton SDI mill in Sinton, Texas, will focus on flat-rolled products for the automotive industry. Market participants anticipate an average monthly scrap buy of 100,000 gross tons. Given the magnitude, present scrap flows could be interrupted.

In August 2020, SDI completed the purchase of Mexico’s Zimmer Recycling under its OmniSource metals division in anticipation of scrap feed needs in Texas. Zimmer has six recycling facilities with strong industrial relationships with northern Mexico mills that will ensure a continuous feedstock of busheling to the Texas mill. The purchase gave SDI access to an annual capacity of 2 million tons of scrap. Domestically, OmniSource does not have facilities in Texas but has facilities in nearby states like Oklahoma, Missouri and Alabama.   

BRS: Looking beyond the U.S. border

In April 2018, BRS announced an option agreement with the board of commissioners of the Port of Brownsville for a 1.6-million-ton steel mill and distribution facility in south Texas. (As of early December 2020, U.S. Steel announced its intention to purchase BRS.)

The Port of Brownsville has been in confidential discussions with BRS for some time on using the port for trade. BRS selected the site not only because it is the only U.S. deepwater seaport directly on the U.S.-Mexico border, but it also is a major source of steel scrap. The port’s recycling facility also handles offshore drilling platforms, automobiles, rail cars, white goods and more apart from shipbreaking and recycling. BRS estimates that Brownsville recyclers could supply 500,000 tons of the 2.2 million tons required by its EAF annually. The port also provides access to additional scrap by barge and rail.

BRS has yet to announce a final plan and financing sources. Inadequate power infrastructure has influenced the EAF’s launch. Once fully approved, the project is four years out.

JSW: Leaning on domestic production

In March 2018, JSW announced a $500 million planned expansion in Baytown, Texas, that included steelmaking capacity of 1.1 million tons. The mill’s melting capacity would eliminate the need to transport slabs as raw material. Companies reliant on imported scrap have been affected by Section 232 import quotas and tariffs, providing an incentive for domestic production. 

JSW has shifted strategies and recently hired Mark Bush as its chief executive officer. Bush is overseeing the upgrades at its Ohio Mingo Junction mill and strategic integration with the company’s Texas plate and mill pipe production site.

Focus was placed on upgrading the Ohio mill by the first quarter of 2021 to supply Baytown with raw materials by late Q1 to early Q2 of 2021. In the process, the Baytown facility was temporarily idled until Ohio can ship slab supplies.

Purchasing contracts for the furnaces at Baytown have not been signed as of early December 2020. Bush had said in August 2020 that the melting plan for the mill remains on the table but on an extended timeline depending on demand and pricing trends. According to some scrap dealers, JSW has its work cut out to manage a U.S.-based steelmaking asset as the entity has not fared well compared with other mills when steel faces downturns and rapidly resorts to closures.  

Others in the fray

With the growing number of EAFs in Texas, competition for scrap will increase. Commercial Metals Co. is scheduled to begin operations at its 500,000-ton merchant bar quality micromill near its existing 400,000-ton micromill in Mesa, Arizona—a potential hub for scrap to Texas.

Nucor’s new 1.2-million-ton plate mill in Kentucky will allow for less volume to be available to the south. On the eastern region, Nucor also is expanding its footprint in Florida with its 350,000-ton annual capacity Frostproof rebar micromill. Evraz is proceeding with its $500 million mill expansion in Colorado. 

The growing Mexican steel production market currently is facing diminished feedstock because of the pandemic, and Mexican mills are aggressively pursuing U.S. scrap. While Mexico is a net importer of scrap, the phenomena of lower scrap generation because of the country’s economic deceleration has placed added pressure on Mexican mills, with the situation expected to continue into the second half of 2021.

Scrap dealers and buyers are somewhat concerned about the effect that new mills in Texas will have on export flows. Prime grades produced in Mexico historically have been imported into the U.S. as Mexico’s EAF production of wire rod and rebar does not require the higher quality scrap, while secondary grades are imported. A Mexican dealer says, “Any incremental demand will provoke pressure on scrap prices, flows and tonnage access, and I doubt these new mills will be the exception.”  

China’s shift to EAF production will increase short-term demand for ferrous scrap globally. In the long term, as China generates more scrap, its domestic supplies are expected to satisfy its mills with the possibility that China could become a net scrap exporter.

Zulma Herrera is an analyst with Davis Index and can be reached via email at zulma.herrera@davisindex.com.