The processing machinery at a recycling plant yields an ongoing set of operating costs tied to a range of factors. Managing these costs, including making the proper determination as to when to invest in new equipment, can make the difference between a profitable and unprofitable year.

Shredding equipment comes to mind when recyclers think of replacement (or wear) parts. Sorting and screening equipment might be thought of first in terms of maintenance tasks and attention to calibration and settings.

By comparison, balers might seem to fall into more of a “plug and play” category, but the people who operate and service these machines can point to a number of decisions and routines that can make an enormous impact on the cost of compressing bottles, cans or paper into dense bales.

It will cost you

The variety of baling equipment at work in the recycling sector is considerable. It ranges from small, vertical models placed in retail backrooms to sizable horizontal balers on the job in material recovery facilities (MRFs) to high-powered ferrous balers designed to squeeze steel into compact cubes.

The price of the baler, naturally, is tied to its size, output and compression force. The cost of a backroom vertical baler might be a single-digit percentage of what the operator of a large MRF will pay for a new, large-volume two-ram or extrusion style horizontal baler.

“The current price range for a new two-ram baler is $300,000 to $1 million,” says Roy Daily, CEO of Himes Service Co. and Daily Recycling Equipment. The two Waco, Texas-based companies sell and service a range of balers, including two-ram models.

He adds, “The final price will depend on the required volume needed and how much material [buyers] want to process.”

Daily says current operators of balers and those shopping for a used machine need to keep one critical word in mind: maintenance.

Having access to or assessing the maintenance history of a preowned baler can make the difference between a satisfied buyer and one who will experience buyer’s remorse. 

Daily goes so far as to say the price one pays for a used baler “purely depends on how the baler was maintained during its use. If the baler was properly maintained, it will retain a good part of its value. Otherwise, the opposite will occur.”

Baler owners with an aging machine also can consider the prospect of a rebuild, Daily says. 

He says, “A rebuilt baler is going to cost significantly less than a new one and might be available significantly faster.”

Photo from Recycling Today’s archives

Using two-ram balers as his benchmark, Daily adds that, “A reline on an existing baler costs about 10 percent of the cost of a new baler and takes a week or two to complete.” 

In a market where new baler fabrication plants can have a backlog, “A new baler generally takes three to four months to deliver,” he adds.

Baler operators face ongoing operating costs, with line items in this category including baling wire, electricity, labor and preventive maintenance.

Emerging savings frontiers

Corporate chains of command often emphasize a mission of controlling costs. For baler operators, this mindset can be helpful when it comes to spending on power, wire and labor. Daily says scaling back on maintenance, however, too often will add to total costs. 

Baler manufacturers tend to compete with each other in introducing new models designed to consume less power and minimal wire and to offer automation features that promise to keep operators’ labor costs in check.

“New technology in baler manufacturing is producing a faster, more energy-efficient product,” Daily says. Some of this technology is transferable to older models, he adds. “All existing balers can be retrofitted with a new wire tier or operating system. This, in turn, will make an existing baler more energy-efficient, produce faster and increase overall savings and profit.”

Standardization in components has provided another efficiency advantage, Daily says. “Most manufacturers are creating more standardized equipment, which means parts are more readily available off the shelf and not just [from] the manufacturer,” he adds.

Daily estimates energy consumption comprises 25 percent of a two-ram baler owner’s operating costs, while baling wire purchases contribute another 25 percent of operating costs. That leaves fully half of all operating costs tied to labor and maintenance considerations.

Attention to detail

The word “routine” often is placed before the word “maintenance,” and baler owners could be well-served to consider this. “Training staff to perform daily housekeeping and preventive maintenance tasks like good housekeeping and daily checks is the baler owner’s first line of defense to keep operating costs under control,” Daily says.

He also advocates for baler owners to contract with a manufacturer, dealer or independent service provider to undertake “regular (monthly or quarterly, depending upon volume) preventive maintenance.” Providing access to “equipment experts” is “key,” he says.

Cost savings are evident when in-house staff who take the time and have the training to do so can spot a looming problem by sight (or sound), Daily says. “When issues are identified during daily checks or scheduled preventive maintenance, it is imperative to get them fixed properly right away.”

Photo from Recycling Today’s archives

Daily advises against the seemingly thrifty notion of a quick patch job. “Rigging up workarounds can cause undue wear on the machine, which can lead to decreased efficiency and increased repair costs later.”

If a baler serves as the final processing step at a high-volume MRF that contains a bounty of sorting lines, screens and optical scanners, its maintenance becomes even more crucial, he says. 

“The baler is the heart of a recycling system, and when the baler suffers from lack of proper maintenance, the entire system suffers and in turn the bottom line,” Daily says. “Properly maintained balers will allow the owner to control and rein in any operating costs.”

Daily says he has seen good maintenance create return on investment in the form of long baler life and having a saleable piece of used equipment if a facility outgrows its existing baler.

He warns, “A great baler that isn’t well-maintained could have to be replaced in three to five years.” Conversely, Daily says, “We’ve got customers with 30-to-40-year-old [Harris] HRB8 and HRB10 two-ram balers that are still processing great thanks to regular maintenance and relines.”

He concludes, “I can’t stress enough the importance of good maintenance. Maintaining a baler costs significantly less than replacing one. Properly maintained equipment lasts longer, is more efficient and has reduced downtime.” 

The author is senior editor with Recycling Today and can be contacted via email at btaylor@gie.net.

Overall, 2021 is off to a good start for recovered paper markets. As of January, pricing has increased slightly or remained steady for almost all recovered paper grades. Brokers and material recovery facility (MRF) operators say paper mills all over the world continue to request more recovered paper. And generation has not slowed much as of the first week of January.

“There is robust demand,” a broker with several U.S. offices says. “Demand for containerboard is crazy right now. There are many mills that are sold out for four to six months.”

“Demand for containerboard is crazy right now. There are many mills that are sold out for four to six months.” – a broker with several U.S. offices

Demand is especially hot for old corrugated containers (OCC). A broker based on the West Coast says he’s doubtful OCC pricing will decline in the near-term future. “There’s too much demand for it. The paper mills [in the Pacific Northwest] are running in the mid-to-high-90-percent range. There is new capacity coming online that will use more corrugated.”

The broker adds that box demand has increased, too. He says, “In general, I’m bullish on corrugated for the first half of 2021.”

Several recovered paper traders have reported that export markets for OCC are a little stronger than domestic markets. Axel Iglesias of Deerfield Beach, Florida-based 4G Recycling Inc. says India, Latin America and other Asian countries are ordering a great deal of OCC right now.

Mixed paper pricing is much stronger than it was one year ago. Bill Keegan of Shakopee, Minnesota-based Dem-Con Cos. says he’s happy to see domestic mixed paper prices above the $30 per ton range. “I never thought $35 per ton was good, but from where it was last year, yes, that is good.”

While pricing and demand for most recovered paper grades are strong, the availability of shipping containers and trucking continues to be problematic as of mid-January.

Sources say many sailings have been canceled or delayed. The broker with several offices in the U.S. says export logistics are “extremely scarce and complex.”

“I never thought $35 per ton [for mixed paper] was good, but from where it was last year, yes, that is good.” – Bill Keegan of Dem-Con Cos.

He adds, “Containers are hard to get. It doesn’t matter what you pay for freight; you can’t get enough containers.”

On a positive note, there is new capacity coming online that will help keep prices up and materials moving. In mid-January, the Northeast Recycling Council (NERC), Brattleboro, Vermont, released an update to its “Summary of Announced Increased Capacity to Use Recycled Paper” report, highlighting 28 expansion projects in North America that will help boost recovered paper demand in the U.S. NERC reports that 9 of the 28 expansion projects have been completed so far.

The positive outlook for recovered paper is welcome news for many in the recycling industry, especially as many were concerned that China’s exit from the marketplace Jan. 1 could have an adverse effect on recovered paper demand and pricing.

“I think we, and other exporters and traders, were bracing for this collapse when China backed out,” the broker with several U.S. offices adds. “China dropped out without much of a word. And the number of boxes that people needed did not change.”

Iglesias adds that he was surprised yet relieved China’s exit did not disrupt recovered paper markets as had been anticipated. “That was a big surprise for most of us. We all thought it would be a price drop. I think what this shows is that most people have established non-China markets.”

In hindsight, Keegan says he thinks the long-term impacts of China’s Green Fence and National Sword policy have positively helped recyclers to offer mills higher quality recovered paper.

“Our industry as a whole has a higher quality product on the fiber side than we had three to five years ago,” Keegan says. “We’re going to start to see the benefits of that as domestic markets can consume higher quality products.

He adds, “We’ve made improvements to processing equipment. Is recycling more expensive to make better product? Yes. But we’re making a better product and can consume a better product than if this hadn’t occurred. We’re a cleaner, better, more-efficient industry.”

Plastic film scrap has seen strong demand heading into 2021, and the availability of polyethylene terephthalate (PET) bottle scrap has tightened. Regardless of which material contacts are sourcing, they say trucking is more difficult to secure and expensive.

“Scrap availability for postconsumer A Grade film is very tight,” says Charlotte Fischer, senior commodities manager for PreZero US Inc.’s Jurupa Valley, California, plant. She attributes that in part to more aggressive buying by consumers in Indonesia, Malaysia and India, the latter of which she describes as actively buying off the West and East coasts. Additionally, Fischer says, “Some LDPE (low-density polyethylene) mills in Taiwan are coming into the market to buy film.”

New domestic consumers also have emerged in California, she says, and are buying trial loads of film as they ramp up reclamation operations.

“The market is getting tighter and tighter,” she says.

As one would expect, pricing for film scrap has increased along with demand.

“Scrap availability for postconsumer A Grade film is very tight. … The market is getting tighter and tighter.” – Charlotte Fischer, senior commodities manager, PreZero US Inc.

Fischer says A Grade LDPE film bales were selling for 10 to 11 cents per pound in the summer of 2020. By the fall, the material was selling in the 13 to 14 cent range. As of mid-January, it is selling for 16 to 17 cents per pound delivered to domestic consumers or FAS to the Port of Long Beach, she says.

Fischer says her colleague who is buying for the company’s South Carolina facility, which is currently reclaiming mixed rigid plastics (MRP), has had no issues securing material. “In the fall, MRP can get pretty tight. He didn’t have that issue this fall going into the winter. There is more than enough MRP to go around.”

A PET bottle reclaimer based in the Midwest says scrap was readily available over the last three to five months following some tightness early in the pandemic. However, supplies began to tighten in January, with a corresponding modest increase in pricing. However, she says pricing is “phenomenally low.”

Paul Bahou, president of PET reclaimer Global Plastics Recycling Inc. in Perris, California, says of scrap availability, “When the weather gets colder, supply is tighter and so pricing goes up.” In California, that tightness has been exacerbated by increased buying out of Mexico, he says, as is the case for LDPE scrap.

Grade A PET bottle bales are selling for 16 cents per pound as of mid-January in the state, he adds, though transportation costs are adding considerably more to the cost of bringing in material.

Bahou jokes that securing a truck costs “a full semester of college tuition.” He adds that rates are “more regional than they used to be,” with long-haul prices having increased significantly. For example, the rate to ship via truck to Texas from California has tripled, he says.

Fischer says she’s seen rates double for long-distance hauls and often increase at the last minute. Availability also is tight.

The PET reprocessor in the Midwest also is having issues with long-distance trucking, which has caused her company to plan further ahead in this area. “We are trying to look two and three days ahead and try not to wait until the last minute.”

Transportation-related issues aside, the PET reprocessor says, “I am looking for 2021 to be a better year than 2020. I don’t think it can be anything but better, but you just never know.”

Ferrous scrap prices have been climbing since November, with the prompt industrial composite price reaching a U.S. average of $499 per ton in January, according to the Raw Material Data Aggregation Service (RMDAS) from Management Science Associates. This was a gain of $186 from November 2020. Rising ferrous scrap prices tend to draw out nonferrous scrap, too, but higher aluminum and copper scrap prices also deserve some of the credit.

London Metal Exchange’s (LME’s) copper cash settlement price Jan. 15 was $7,979.50, compared with $6,231 one year earlier, while the aluminum alloy price was $2,000.50 Jan. 15 compared with $1,778 the previous year.

“As pricing has increased, so has the volume of scrap available,” Randy Goodman, vice president of the brokerage firm Greenland (America) Inc., Roswell, Georgia, says. “I’m pretty amazed at how much red metal scrap was available when the markets took a jump” in late 2020.

“High commodity prices should keep the nonferrous metals flowing in, and we feel business momentum will continue to grow with pent-up demand from manufacturers and consumers.” – Mitchell Goldberg, CEO of Northeast Metal Traders

Mitchell Goldberg, CEO of Northeast Metal Traders in Philadelphia, says copper scrap is flowing well in historical terms. However, he adds, “There seems to be a cash crunch for a number of our suppliers, leading them to focus less on traditional pricing considerations and more on the quickness of payment terms.”

A trader whose company has processing operations in the Midwest and Southeast says supply and demand have been “spotty.” Regarding demand, he adds, “It depends on the day. Some consumers are in and out of the market very quickly. Others are consistently strong, and others are consistently out. It’s the same with export.”

While most domestic buyers of copper scrap are in the market, he says they are conservative in their buying. “With the market run-up, they are working down their inventories and keeping deliveries to just in time,” the trader says.

Yet many mills are full and not taking deliveries until late February or early March, Goodman adds.

“Most places are already full for February,” the trader for the company with operations in the Midwest and Southeast says as of mid-January. “We’re selling March already. We sold February in December or the beginning of January. It’s perpetually further and further out.”

He says aluminum scrap supply seems tighter than that for copper scrap, and he predicts that it will get tighter.

The trader says primary mills are more aggressive than secondary producers in terms of pricing and demand, with spreads tightening. Delivery appointments are readily available with mills, he adds.

Michael Diehl, a senior vice president based in Southern California for Coremet Trading Inc., based in New York City, also mentions strong demand for secondary aluminum grades. “Auto sales are surprising automakers that are short” on inventory because of shutdowns related to the pandemic in the early part of 2020.

Goldberg says supplies from scrap dealers were severely reduced early in the pandemic but are now approaching prepandemic levels. “We are readily able to sell our metal, but transportation restrictions make production and scheduling more difficult than we’ve ever experienced before. High commodity prices should keep the nonferrous metals flowing in, and we feel business momentum will continue to grow with pent-up demand from manufacturers and consumers.”