In the aluminum scrap sector, contacts report that it’s a seller’s market, as generation remains somewhat lighter than normal though demand has picked up.

“Consumers want to ensure a steady flow of material heading into 2021,” says Chad Kripke, executive vice president of Kripke Enterprises Inc., Toledo, Ohio. The company is a nonferrous scrap brokerage firm that specializes mainly in aluminum. “There is a larger than normal mix of sellers who decided to weigh heavier on the spot market versus contract business for 2021,” he adds. “Scrap processors are feeling confident that 2021 will be the year to regain some leverage. With spreads remaining tight, it is still a seller’s market for the foreseeable future.”

A trader for a multilocation scrap processing and brokerage company headquartered in the Midwest shares Kripke’s enthusiasm for the year ahead. “If we can keep manufacturing humming through COVID, you can argue that demand for scrap will be really strong next year,” he says.

“Scrap processors are feeling confident that 2021 will be the year to regain some leverage. With spreads remaining tight, it is still a seller’s market for the foreseeable future.” – Chad Kripke, executive vice president, Kripke Enterprises Inc., Toledo, Ohio

A contact with a scrap brokerage and trading company with operations primarily on the West Coast also mentions the shift to a seller’s market, noting that also is the case with export. “Reduced flows of scrap have caused spreads to tighten across the board.”

While nonferrous scrap generation has been increasing since the summer, it is not quite back to prepandemic levels. The Midwest-based trader says industrial flows are at 90 percent as of the end of 2020.

Kripke describes obsolete generation as “spotty,” though he adds that it appears to be increasing. “It is difficult to determine what is coming out of the woodwork due to the rise in the market versus what would have otherwise been available had prices stayed stagnant.”

The Midwest-based trader says aluminum scrap is in high demand at secondary smelters that supply the automotive industry. He adds that these consumers have been competitive on mill-grade aluminum scrap, as well. Rolling mills also are demanding aluminum scrap. “Even segs have gotten hot again,” he says, referring to segregated low-copper clips.

According to surveyed pricing data from Fastmarkets AMM, segregated low-copper clips were selling for a U.S. monthly average price of 42 cents per pound in the December 2020 buying period, up from nearly 30 cents per pound in the November buying period.

Kripke says, “Demand for extrusion and common alloys are very strong, and spreads remain very tight. Prices also are rising sharply for secondary grades.”

Red metals demand, whether from domestic or international consumers, is not as robust as that for aluminum. The Midwest-based trader says, “Domestic consumers have been able to buy at whatever spread they think is right.”

Some red metals consumers have been out of the market for the last couple of months, the trader says in mid-December, and another consumer has announced that it will be out of the market in February. Despite that, he adds, “We’re able to sell what we need to.”

Since China began accepting “furnace-ready” nonferrous scrap shipments as of Nov. 1, 2020, the Midwest-based trader says he’s been watching to see how customs clearance is progressing. He explains that he’s not sure how closely inspectors will adhere to the published specifications. His company is not quite ready to begin shipping material there until it has more clarity in this area, the trader adds.

The COVID-19 pandemic has grounded holiday travel plans for many Americans, but it has contributed to high-flying ferrous scrap prices in the late 2020 holiday season, as overseas and domestic demand outstripped supply.

In late November, overseas demand began putting upward price pressure on U.S. ferrous scrap supplies as governments around the world funded steel-intensive infrastructure plans. By the time domestic mills started making offers in early December, they encountered a loftier market that began rising some more.

“The export market is on fire, and it even caught me by surprise a little bit,” Nathan Fruchter of New York-based Idoru Trading tells Recycling Today in late November. Fruchter says in addition to the usual purchases from Turkey, buyers in Latin America and the Indian subcontinent were bidding aggressively for American scrap.

“Business has really slowed down the last month or so. It’s definitely not because of pricing.” – Midwestern scrap processor

Fruchter says many Turkish buyers have shifted their attention to the lower priced European and Black Sea markets, but those options are not available to Central and South American mills. Buyers for these mills have been willing to pay up to $20 or $30 more per ton to secure supplies from U.S. shippers to feed furnaces in their rebounding steel sectors.

“Buyers from Mexico, Peru, Ecuador and Brazil are all out there buying en masse,” Fruchter says of the late November market. “Over the years, we have seen all these countries buying scrap, some on a regular basis, others on and off, and some even—like Brazil—often off. But I cannot recall seeing so many [Latin American] buyers converging simultaneously on the market during the same month,” he adds.

Mills in those nations, Fruchter says, were “buying domestic scrap in their own markets, but there simply isn’t enough to go around. So, they look to the U.S. and are offering figures considerably higher than what the Turks are able to pay.”

He says that while East Coast and Gulf Coast shippers entertain the higher Latin American offers, for West Coast exporters, “Prices in Asia, from nations including Bangladesh and Vietnam, are strong enough, so they keep looking in that direction.”

A Dec. 3 report from the United Kingdom-based Seatrade Maritime News describes a “bull market in Bangladesh,” with prices there nearing $400 per long ton for containerized scrap. The surging market was likely to mean “recycling yards in both India and Pakistan will have to raise their price ideas.”

The ripple effect of the overseas demand was clear by the time Fastmarkets AMM settled its Midwest Index prices Dec. 10. Pricing for two of the three Midwest Index grades (No. 1 busheling and No. 1 heavy melting steel, or HMS) rose by more than $80 per ton, while the price of the third (shredded scrap) rose by nearly $76 per ton.

That outpaced the average export prices as tracked by Fastmarkets AMM. The publication had early December East Coast export prices settling at just under $340 per ton (about a $75 per ton increase over November) and West Coast prices averaging $316—only about $20 higher than November.

While the rising prices created the potential for a healthy margin for scrap processors, the bad news is that seasonal and public health factors limited the amount of scrap flowing into yards.

“We expect our flows to settle in at or return to 70 percent of pre-COVID levels,” says a processor on the East Coast about his company’s volume levels heading into the new year.

A processor in the Midwest says, “Business has really slowed down the last month or so. It’s definitely not because of pricing; I just don’t think there is as much scrap out there. I’m hoping for an uptick soon, but it might be a few months.”

The East Coast processor continues, “Domestic bids kept rising as mills couldn’t get their fill. We sold domestic plate and structural at up $65 early in December but could get another $20 now.”

Export demand, likewise, seems poised to continue, the processor says. “Container shred prices started November at less than $300 per metric ton but are now at $365 per metric ton.”

Regarding containerized ferrous scrap shipments, Fruchter says a constraint has taken shape as container and booking shortages are factors affecting several U.S. and Canadian port regions on the East and West coasts.

Winter weather, seasonal factory retooling programs and virus-related restrictions in economic activity contributed to the late 2020 spike in ferrous prices. “We have been fortunate to have been involved in some good demolition projects in November, but some of that is slowing down,” the East Coast processor says as of mid-December.

Industry groups including the Institute of Scrap Recycling Industries (ISRI), Washington, and the National Waste & Recycling Association, Arlington, Virginia, as well as lugger manufacturers and other organizations, have been meeting for years to develop a set of standards for lugger container securement that could be accepted by the Commercial Vehicle Safety Alliance (CVSA). The CVSA, based in Greenbelt, Maryland, seeks “to achieve uniformity, compatibility and reciprocity of commercial motor vehicle (CMV) inspections and enforcement by certified inspectors dedicated to driver and vehicle safety,” according to a description on its website.

The standards are the first of their kind to meet the Federal Motor Carrier Safety Administration’s (FMCSA) 49CFR 393.102(c) regulations regarding the minimum performance criteria for cargo securement devices and systems.

ISRI says the standards will simplify cargo securement procedures for CMV drivers and provide equivalent means to other standards for lugger truck cargo securement.

The new standards

The new cargo securement standards require operators to chain or strap the lugger container to the body of the CMV. In some cases, as many as eight winch straps are needed per container.

According to the CVSA Inspection Bulletin dated Sept. 28, 2020, the requirements only apply when the CMV isn’t equipped with an integral securement system, which is a system on certain roll-on/roll-off and hooklift containers and their related transport vehicles that mates compatible front and rear hold-down devices to secure the complete vehicle and its cargo. Lugger container vehicles do not have these integrated securement systems.

Because the United States and Canada did not specify in their standards how that securement needed to be done, the industry created several different types of securement to prevent forward, rearward and upward movement. Without an integral securement system, other ways of securement are needed for lugger container vehicles, according to the CVSA bulletin.

Put to the test

Industry tests helped to determine the equivalent methods for securing lugger boxes.

In August 2020, Cleveland-based roll-off trailer and lugger hoist manufacturer Ace Brother’s Equipment Inc.; ISRI; Fond du Lac, Wisconsin-based Sadoff Iron & Metal Co.; Fond du Lac-based Whealon Towing & Service Inc.; and the Wisconsin State Patrol worked together to test securement methods for lugger trucks that would be approved by CVSA.

“Our initial testing was done in July, and it passed two of the three tasks,” Andy Coates, fleet operations manager at Sadoff Iron & Metal Co., says. “The third one had failed, so I had to go back and come up with a couple of different ideas to look at the forward acceleration of the container. We tested those, and we were able to get positive results.”

Coates says the change to this standard was important because it made the process more efficient and saved money, but it also improved safety. The old method of securement took around 10 minutes, while with the new standard it can be completed in about 90 seconds to two minutes.

“Our initial testing was done in July, and it passed two of the three tasks.” – Andy Coates, fleet operations manager, Sadoff Iron & Metal Co.

So far, he says, the feedback from his drivers has been good.

“Most of the guys have embraced it and actually had some positive comments,” he says of the new standards. “Previously, the containers would kind of wiggle around on the trucks, and now they don’t anymore. Not that they were in danger of going anywhere, but they keep it a bit more steady on the truck,” he says of the new securement method.

Coates adds that his company’s trucks are black and red. When searching for new chains to meet the securement regulations, he found bright yellow ones, which, while unintentional, have been helpful.

“My contact with the state patrol actually texted me in the last week, and he saw one of our trucks going down the other side of the highway,” Coates says in early December 2020. “He saw that yellow chain, and it just leaves no doubt that it’s secure, it’s visible,” he adds.

Know your options

Two different options prevent forward movement when securing the lugger box through equivalent means.

Option 1: With this option, the pin must be extended within 4 inches of the channel on the lugger box (if so designed) to prevent forward movement, CVSA’s Inspection Bulletin notes. (The channel on the box must be placed on the rear side of the pin.)

Option 2: With the second option, at least two securement devices are required, each with a minimum working load limit (WLL) of 9,200 pounds (4,173 kilograms), according to the CVSA. A minimum of one tiedown on each side going directly from the power unit hoist body to the container lift lugs or lifting keys is required. (Half-inch grade 80 chain is required, with a WLL of 12,000 pounds.)

Only one option is provided when it comes to securing against rearward and lateral movement.

With rearward movement, the pin must be extended, and the dump hook or dump key must be forward of the pin and attached to the container.

With lateral movement, the pin must be extended, and a space of up to 4 inches (10 centimeters) can be between the pin and the container on either side of the box.

When securing front and rear lifting chains, the lift chains can be loose during transit. This is not a violation, according to the bulletin, as the chains are not considered tiedowns for the purposes of cargo securement. Rear lift chains can be used during transit/roadside inspection.

If the equivalent means cannot be used, general commodity requirements would apply.

The lugger box must be secured for length and weight and requires a number of tiedowns to satisfy both requirements (e.g., one tiedown for every 10 feet or portion thereof plus an additional tiedown in the first 10 feet if not against a front-end structure; the aggregate WLL of the tiedowns must meet half the weight of the container and load), the CVSA says. Lugger box securement should be at the fixed longitudinal midsection between the lugs on the side of the lugger container. Any method is acceptable, but this can be achieved by using a tightening device (chains or straps) connected directly to the sides or top of the container. The tightening device must be anchored to the vehicle on the other end, according to CVSA.

Coates says the next step in this process is to get these standards written into regulation. “Currently, this only exists as an inspection bullet with CVSA. It’s not in regulation yet. So, the next step would be to take it to the FMCSA,” he says.

The author is the digital editor for the Recycling Today Media Group and can be reached at kcunningham@gie.net.

Since CompuCycle was founded in 1996, the Houston-based electronics refurbisher and recycler has expanded, both physically and in terms of the services it offers. Though it has tripled the size of its operating facility and changed ownership since that time, CompuCycle’s co-owners say the goal always has been the same for the family-owned business: making clients feel like much more than just clients.

Before CompuCycle, there was Complex Metals Inc. Back in 1986, Clive Hess and his father, John, emigrated from South Africa to the United States, settling in Houston. John purchased a share of a local metal alloy distribution company. He had been in the scrap metal recycling business in South Africa, and that company was focused on recycling electronics to recover the precious and nonferrous metals they contained.

After Clive graduated from the University of Houston in 1992, he joined his father’s company, Complex Metals Inc.

The father and son saw a void in the city when it came to electronics recycling services. To fill that void, they formed CompuCycle.

“Together, they built a company focused on recycling scrap electronics into raw materials for feedstock to mills, smelters and refineries and refurbishing reusable electronics to extend their useful life as an alternative to purchasing new product,” says CompuCycle President and CEO Kelly Hess of the work the men did to establish the electronics recycling firm. “John and Clive really created a company that has been an industry leader in Houston as an electronics recycler.”

Kelly says she’s been a part of the business since she married Clive 19 years ago. When their kids started school, she brought her public relations and marketing skills to the company as a full-time employee.

During the last 24 years, CompuCycle grew and moved to a larger facility. In 2013 Kelly stepped into the role of president and CEO. She and Clive also bought the business from John. Kelly purchased 51 percent of CompuCycle, making it a woman-owned enterprise, though she and Clive share ownership responsibilities. They say they believe the change in ownership allowed the business to grow and offer even more to clients.

Focusing on all aspects of information technology asset disposition (ITAD), including data center decommissioning, on-site IT asset inventory/validation services and on-site hard-drive shredding, CompuCycle executives say it’s important to offer clients what they need from a single facility.

Transitioning ownership

After joining CompuCycle full time, Kelly says, “I was able to grow the company and saw a need for us to become a woman-owned business. And it really has been a growth opportunity.”

As she and Clive brought on more corporate clients, Kelly says they often were asked if they were woman-owned. So, about eight years ago, they bought the company from John, and Kelly became the majority owner.

Its woman-owned status doesn’t guarantee CompuCycle new clients, Kelly says, but it does open the door for potential success and opportunity as such companies could benefit from government or private grants, local bank and other loan programs and government contracts.

While the business has always been family-owned, she says the dynamic is different between spouses compared with a father-and-son team.

“You know, a husband-and-wife team I wouldn’t say is always ideal, but we definitely use both of our strengths and are able to make it grow and work to our advantage and have really built quite a phenomenal business,” she says.

“[John] got the business to a certain level and was able to really run an efficient company, but Clive and I saw the ability to grow this company,” Kelly says, adding that female ownership helped to fuel that growth.

Under Kelly’s majority ownership, CompuCycle has worked to help corporate clients with diversity goals meet their objectives, setting itself apart from its competition.

“We are the only company in Texas and [the] only woman-owned company capable of shredding electronics and separating them into raw materials,” Kelly says. She adds that the reasons she is able to succeed in the male-dominated electronics recycling industry are “[l]istening and providing tailored solutions to our clients’ needs,” which include “secure recycling, brand protection, responsible processing, refurbishing product for reuse and elimination of the middleman.”

Everything’s bigger in Texas

CompuCycle doesn’t just service customers locally—the business also serves companies around the world through partnerships with other service providers. Five years ago, it brought on a new client that needed international services. “We have serviced this client and others in the USA, Canada, Mexico, Central America, South America, Europe, Asia, Africa and Australia successfully,” Kelly says.

“There’s nothing that we really can’t handle when it comes to our customers,” Clive says.

When Kelly and Clive took over the business in 2013, they planned to expand but needed more operating space. In 2018, the opportunity became available for CompuCycle to purchase a new building.

“We went from 40,000 square feet to 80,000 square feet,” she says. “That following October, we purchased the building next door, or an additional 40,000 square feet.”

That expansion allowed CompuCycle to add a processing plant with a shredding system.

“We have a processing plant next door that’s [a] state-of-the-art, fully automated electronic shredding system,” Clive says. “If materials can’t be recycled and reused, it’s going through that processor, and it is going to its bare components,” he adds.

Kelly says it was important for CompuCycle to have everything it needed in one facility so no middleman was needed, adding that “it comes to us [and] ends with us.

“Our variety of services include responsible recycling, data center decommissioning, on-site IT asset validation/inventory, on-site hard-drive shredding, IT asset relocation and deployment and IT lease return management,” she continues.

Set apart by service

Clive says CompuCycle focuses on the level of service and security it offers clients. Using propriety software for hard-drive sanitization, he says drives are linked to the device that once contained them to enable thorough reporting to clients.

“When we provide the reports for their hard drives, not only can we give them the make, model and serial number of the drive, but we also can link them—the serial number and the machine that drive belongs to,” Clive says. “From a compliance standpoint, or if these companies are ever audited, our information that we provided to them is extremely detailed.”

The company also provides secure shredding services to some of its competitors using two shredders manufactured by SSI Shredding Systems of Wilsonville, Oregon.

“We work with a lot of other electronics recyclers,” Clive adds. “We have essentially competitors that are shipping their scrap to us because of our processing plants.”

Kelly says she believes that having equipment on-site is a big advantage, making clients feel safe that whatever materials they turn over will be safely destroyed on-site.

It’s also about making clients feel like more than just clients.

“Clive and I, being the owners of the company, when we get new customers, they become part of our CompuCycle family and team,” Kelly says.

She adds that while each customer has an account manager, she and Clive give clients their cellphone numbers, so they know they are always a priority.

“There is no cookie-cutter approach. Every customer is different, and we want to tailor a solution to make them able to save time and, of course, to be a cost savings and to give them value back from material that we can remarket and reuse.” – Kelly Hess, president and CEO, CompuCycle

“There is no cookie-cutter approach. Every customer is different, and we want to tailor a solution to make them able to save time and, of course, to be a cost savings and to give them value back from material that we can remarket and reuse,” Kelly says.

Clive and Kelly say they pride themselves on their no-nonsense approach, doing what it takes to ensure clients are happy.

“As all small companies, it is very difficult to compete with the likes of Dell, HP, Lenovo and others in selling electronics recycling services to Fortune 1000 companies,” Kelly says. “In 2010 we committed to becoming R2 (Responsible Recycling) certified, and in January 2011 became Houston’s first certified electronics recycling company,” she adds.

As a result, Kelly says CompuCycle has been able to educate clients and prospective clients on certification as well as to improve its processes and procedures.

What’s next

With the ongoing COVID-19 pandemic, it’s hard to make predictions on growth and change, but the Hesses say they believe CompuCycle will get through this challenging time.

“Most of our clients’ offices are closed or either have restricted access right now, so to be able to go in and get equipment is not happening at this time,” Kelly says.

CompuCycle had a drop-off program for residents, but that also has been put on hold during the pandemic.

Kelly says CompuCycle has received calls about companies going bankrupt and needing to liquidate their IT assets. While that means CompuCycle will gain a customer, she says it means someone else is losing a business.

“The stability of what we had is definitely being challenged,” she says of the pandemic’s effect on the firm.

During the pandemic, she says CompuCycle’s management has taken “significant salary reductions,” and their hours have been reduced to 32 per week. Additionally, the company’s refurbishing plant remains at 50 to 60 percent capacity, and its recycling plant is at 60 percent capacity.

Kelly adds, “With news of the COVID-19 vaccinations, we are optimistic about 2021 and getting our working hours back to 40 hours per week ASAP.”

Once business levels out and returns to prepandemic levels, Clive says he hopes the future of electronics recycling will be brighter.

“We do support a no-landfill policy for electronics; however, Texas does allow electronics to be landfilled,” Clive says. “We would support a bill to end landfilling electronics because we don’t think that’s a good thing.”

When it comes to being a better business, Clive says it’s not just about recovering materials and helping the environment—it’s also about helping people, from its employees to its clients. Continuous improvement factors into CompuCycle’s philosophy.

Kelly says most clients know the business and that it’s never been anything but family-owned and operated.

For CompuCycle and its co-owners, whether it’s communicating to clients about industry standards or sharing information that can benefit them, it all comes back to one goal: making them feel like family.

The author is the digital editor for the Recycling Today Media Group and can be contacted at kcunningham@gie.net.