As of the first quarter of 2018, a period of oversupply in the aluminum market has ended. Demand prospects remain strong and follow two consecutive years of 5 percent growth in total metal requirement.

While the global economic pickup contributed to this, manufacturing trends, including automotive lightweighting, have increased aluminum intensity per gross domestic product (GDP) output. Outside of China, the supply response has so far been slow.

Excluding China, the deficit of primary (electrolytic) aluminum doubled in a year, and new supply has been slow to come online. Supply and environmental reforms in China now are limiting production growth there, and Chinese authorities have closed what they considered to be “illegal” production sites.

Stuck in neutral

Sluggishness in primary aluminum supply provides an opening for recycled aluminum. Recycled aluminum still accounts for less than 30 percent of global consumption. However, although industry and political bodies are promoting higher recycling rates, scrap consumption is still expected to hold at or below 30 percent of total demand. Strikingly, recycled metal’s share of total demand has been falling in the aluminum sector.

The relative fall in recycled aluminum is partially because of China. The country contributed a large part of recent demand growth but has a low share of castings consumption compared with total demand.

Castings are the most scrap-intensive aluminum product. Indeed, aluminum castings account for around 50 percent of aluminum scrap demand, but only approximately 22.5 percent of total aluminum demand. This has contributed to relatively low recycled aluminum consumption.

The castings outlook for China is, in fact, better than in most regions, as it is one of the only locations where the penetration of aluminum castings rose in the 2013 to 2017 time frame.

The fall in aluminum castings’ total share of consumption is expected to become a worldwide trend in future years. Globally, castings’ share of total semis consumption is forecast to fall from above 23 percent to below 21.5 percent by 2027.

While the change looks small in percentage terms, it equates to a loss of 1.6 million metric tons per year in castings consumption by 2027. Castings’ intensity relative to other aluminum products will fall because of changes in consumer trends, particularly in the automotive sector.

Electric vehicles: a threat to scrap?

Electric vehicles (EVs) are a particular risk to global scrap demand as high adoption would likely reduce castings consumption. According to CRU, the automotive industry accounts for more than 60 percent of castings consumption.

These castings, predominantly produced from secondary foundry alloys (SFAs), are used to produce automotive power train components, such as engine blocks, cylinder heads, pistons and drive shafts, where strength at temperature and wear resistance are more important than ductility. As of 2017, the automobile industry accounted for from 65 percent to 75 percent of secondary castings demand in China, Western Europe, Japan and the United States.

Improvements in battery technology and increasing environmental awareness among consumers have pushed the market for EVs to a tipping point. EVs can now rapidly go from niche to mass market, transforming the outlook for certain commodities. Aluminum demand from the transport sector will face great changes as EVs gain market share.

Overall, aluminum intensity is considerably higher in EVs compared with vehicles containing the traditional internal combustion engine (ICE). Battery electric vehicles (BEVs) mainly use primary-aluminum-intensive aluminum products—rolled, extruded and primary castings.

ICEs are secondary-castings intensive—used in engine blocks, piston heads and transmissions—components that are not used in EV power trains. With an engine and a battery, hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) also will rely heavily on primary and secondary castings

The move from ICEs to EVs greatly will increase the intensity of primary aluminum-based products in cars. However, BEVs, which run solely on electric motors, have 44 percent lower SFA consumption per vehicle compared with ICE vehicles.

Other types of EVs that use a combustion engine, namely HEVs and PHEVs, have a less pronounced impact on overall scrap demand.

Consumer decisions in which certain automobile technologies become popular will play a large role in determining recycled aluminum consumption. If consumers move toward HEVs instead of BEVs, the marginal shift from ICEs creates 16 percent more secondary castings consumption per vehicle.

New markets and the near future

While EVs may limit recycled aluminum demand in the U.S., Europe and China, scrap import requirements from other regions will provide a market for excess scrap. By the mid-2020s, the net supply position of four major scrap consuming regions —China, Western Europe, Japan and the U.S.—will move to a surplus (perhaps by the early 2020s).

Lower imports of scrap into China are the main contributor to the surplus, with India importing most of the remaining scrap. Today, China is importing scrap from other regions in addition to those included in the chart on this page, “Rising scrap generation in China will lead to lower imports.” By the late 2020s, however, China’s net scrap imports will fall to a fraction of European, U.S. and Japanese net exports of scrap.

Hence, India will become a particularly important hub of scrap trade and consumption in the coming years. In 2016, India domestically generated only 25 percent of national scrap consumption, with the rest coming in as imports. During the next 10 years, CRU forecasts scrap demand to double to 2.15 million metric tons per year in India, with imports needed to cover this demand.

Indian scrap generation should rise along with urban population growth; therefore, India looks well-positioned to receive excess global scrap from the 2020s onward.

As well as a fast-growing consumption base, the share of Indian castings as a percentage of total semis shipments is expected to remain broadly flat over the next decade, improving prospects for scrap consumption. India can, therefore, look at importing scrap from highly developed regions that are forecast to see declining proportional castings consumption, particularly the U.S. and Japan.

Over the past year, global economic growth and possible U.S. trade actions provided a bullish picture for the aluminum market. GDP growth in North America and Europe remains strong, with the Eurozone posting the highest year-on-year growth since 2007. A weaker U.S. dollar and higher oil prices also are supporting London Metal Exchange (LME) aluminum prices at the $2,200-per-metric-ton level.

The possibility of U.S. trade action on aluminum imports also would help support prices in 2018. Market participants are awaiting a decision by U.S. President Donald Trump over whether to impose import tariffs on aluminum via a Section 232 trade case. The case focuses on whether imports constitute a national security risk to the United States and require duties to be imposed.

While China’s macroeconomic growth remains robust, aluminum stockpiles in that country are rising quickly. With some doubting the effectiveness of Chinese production controls, this may attract selling activity from some fund investors. Already, this has caused futures prices on the Shanghai Futures Exchange to lag those on the LME.

CRU forecasts that the Chinese market will remain in a surplus of above 1 million metric tons in 2018.

Henry Van is an analyst and consultant with London-based CRU and can be contacted at henry.van@crugroup.com. He will provide more insight into the effect of electric vehicles on the aluminum market at CRU’s World Aluminum Conference 2018, http://bit.ly/2zVAMtp, taking place in London in late April.

Machinex adds sales manager for Canada

Machinex Industries Inc., Plessisville, Quebec, has announced that Matt Risko has been appointed as the company’s Canadian sales manager. He has worked as a sales representative at Machinex Recycling Services (MRS), a service division of Machinex, in Pickering, Ontario, since 2009.

In his new role with Machinex, Risko will help to develop sorting system solutions for material recovery facilities (MRFs), Machinex says. He will cover the Canadian territory, except for the province of Quebec, which is supported by the internal sales team at Machinex headquarters.

When Risko joined MRS in 2009, he sold baling wire before moving up to sell balers and peripheral equipment, such as conveyors, optical sorters and compactors. He also worked on notable projects, such as a source-separated organics facility for the city of Toronto in 2011, a MRF upgrade with a polyethylene terephthalate (PET) optical sorter for Northumberland County in 2015 and a PET optical sorter project for the city of Hamilton, Ontario, in 2016, the company says.

“I feel like I have got the call to the big leagues,” Risko says. “I am very excited for the opportunity and look forward to continuing to grow with Machinex.”

Machinex develops sorting, waste management and recycling technology. The company’s experts have designed and installed more than 350 turnkey facilities in partnership with leading MRFs in Canada, the United States, Europe and Australia.

Arconic appoints new CEO

Arconic Inc., headquartered in Norcross, Georgia, has announced that its board of directors has appointed Charles “Chip” Blankenship as chief executive officer and a member of the Arconic board, effective Jan. 15, 2018. He is a 24-year veteran of General Electric (GE) who spent much of his career in its aviation and jet engine businesses, including running its commercial engine operations, Arconic says.

Blankenship brings 20 years of aerospace experience to Arconic, having worked across GE’s aviation businesses, including aero engines, industrial gas turbines and aerospace alloy development. He previously led GE Aviation’s Commercial Engines Operation, the world’s leading producer of large and small jet engines used in commercial aircraft.

A metallurgist by training, Blankenship began his career with GE in 1992 after earning a Bachelor of Science in materials engineering from Virginia Tech and a doctorate in materials science and engineering from the University of Virginia. Blankenship’s GE career culminated in his appointment as president and CEO of GE Appliances in December 2011, where he led a significant turnaround of the business and its subsequent 2016 sale to Haier Co., Arconic says.

Blankenship is a member of the National Academy of Engineering and serves on the board of the National Association of Manufacturing (NAM), where he also has led NAM’s Task Force on Competitiveness & the Workforce. He holds seven patents related to jet engine technology.

Blankenship says, “Arconic is a company with significant strengths and tremendous potential. I am eager to engage with customers, employees and the board to develop plans that capitalize on our strengths and deliver outstanding returns for our shareholders. I am excited to join the team and get started.”

Patricia F. Russo, interim chair of the Arconic board at the time of Blankenship’s hiring in the fall of 2017, says, “We are confident that Chip will lead Arconic to create sustainable and increasing value for customers and for shareholders.”

David Hess, who had served as Arconic’s interim CEO since April 2017, continues to serve on the company’s board.

John Plant, an Arconic director since 2016, was appointed chair of the board in late October of 2017. He succeeds Russo, who stepped into the role on an interim basis in April 2017. She continues her service on the company’s board of directors and as chair the Governance Committee.

Maren adds industry veteran to sales team

South Holland, Illinois-based Maren Engineering Inc. has announced Roger Williams has joined the company as its new western regional sales manager.

Williams is a 27-year veteran of the recycling equipment industry, having previously worked for Georgetown, South Carolina-based Coastal Wire and Bellevue, Ohio-based American Baler Co.

At Coastal Wire, Williams was Midwest regional sales manager. He worked in positions of increasing responsibility at American Baler, including as West Coast regional sales manager and as vice president of sales.

“Roger Williams is an exciting addition to our team,” says Todd Wondrow, president of Maren Engineering. “His technical knowledge of balers and systems couldn’t fit better with the ProPAK series of equipment Maren continues to develop. And no less important, Roger’s customer focus and reputation for integrity parallel what we at Maren promise to our customers.”

Williams can be reached at rwilliams@marenengineering.com.

Maren Engineering has been building high-quality balers since 1962. More than five decades of experience has taught the company about industry demands. Applying the latest manufacturing practices and engineering has helped Maren meet those demands head on!

“We’re observant. We know what works and what does not,” says Todd Wondrow, Maren’s president. Being alert and responsive has led Maren to re-engineer itself along the way. “When I bought into the company I did it with an eye to the future,” Wondrow says.

Maren Engineering has a well-earned reputation for building high-quality, long-lasting machinery. “We’ve built on that legacy by expanding the product line and integrating new technologies and proven manufacturing methods,” Wondrow remarks.

Built to Last

For decades, Maren has produced balers for a wide range of commercial and industrial applications. Today the product line includes two-ram, auto-tie and closed-door manual-tie balers, plus conveyors and shredders used to condition material prior to baling.

“We began building two-ram balers in response to customer demands,” says Mike Blais, Maren Regional Sales Manager. “Our contacts in the industry were looking for machines built to hold up against the toughest requirements and deliver maximum throughput. That’s what we’re building.”

Maren balers are fabricated using interlocking construction, which allows any one part of the machine’s frame to benefit from the strength of the rest of it. “It’s all linked together,” says Wondrow.

“Our large bore A-Series and Two Ram cylinders do not mount with pins in shear, or bolts in tension” explains Wondrow. “Main cylinders are interlocked to the baler’s frame. This creates a steel-on-steel connection that will virtually last forever.”

To ensure each machine ships ready for production, Maren pre-tests key components and does full system testing on each baler. “We also use finite element analysis in our CAD/CAM design phase to engineer out stress points that create undo fatigue,” says Wondrow.

Tested and Ready for the Long Haul

To design a superior automated operating system, Maren invested hundreds of hours working in the plants of customers. By running the machines in production environments, and analyzing customers actions, the team developed Maren’s proprietary Smart Bale system.

Smart Bale provides an easy-to-use menu to select pre-programmed recipes designed for each commodity processed. The system also has monitoring tools that allow for simple and contamination-free material changeovers.

The Smart Bale Mobile Interface allows a mobile equipment operator to also be the baler operator. It’s simple, intuitive and works from a tablet mounted directly on a piece of mobile equipment.

“We laugh that most manufacturers argue that they can’t afford to do the things we do. We just feel that we can’t afford not to do them,” says Wondrow.

If you’re considering an upgrade in your baler, be sure to talk with the Maren team.

800.875.1038, MarenEngineering.com, sales@MarenEngineering.com

Huron Park, Ontario-based Bluewater Recycling Association (BRA) prides itself on the services it provides and the products it produces. BRA is one of the largest multimunicipal resource management organizations in Canada, processing some 20,000 metric tons of recyclables annually from the 20 municipalities it serves.

About eight years ago, it invested in a single-stream processing system from Machinex, Plessisville, Quebec. At that time, Francis Veilleux, BRA president, said the design was well-thought-out to emphasize quality over quantity. It was a departure from many material recovery facility (MRF) designs that were geared more toward “handling large quantities of material with little regard to the quality of the end product or the amount of residue generation,” he said.

Machinex’s dedication to the project and willingness to develop a solution that fit Bluewater’s needs all those years ago left a lasting impression on Veilleux.

Quality assurance

BRA’s dedication to quality has not waivered all these years later. In 2017, the company decided to see whether it could improve the quality of its recyclables even further.

“We have minimized the production of mixed paper, and we have increased the production of quality ONP and OCC that meets and exceeds the new China requirements.” – Francis Veilleux

“We carried out a performance assessment of BRA’s MRF and identified areas that could benefit from improvements,” Veilleux explains.

From the audit, some key findings confirmed Veilleux’s suspicions that upgrades to some existing screens could help reduce contamination percentages and allow more of the higher-value fiber grades to be recovered, including the old corrugated containers (OCC) and the old newspapers (ONP) that were ending up in the mixed fiber bunker. The company also determined it could improve recovery rates for office paper that was ending up in the residue stream.

In addition, BRA wanted to prevent residues from getting into the mixed paper bunker, because it could potentially devalue or jeopardize the marketability of that material.

Armed with the information, BRA was ready to find solutions. “Our suspicions were proved and, as a result, the BRA ventured to find alternative technologies to remedy the performance of the disc screen,” Veilleux says.

Turning to Machinex

BRA decided to stick with the solutions provider that already understood the company’s dedication to quality. Machinex was the clear choice to make the improvements BRA had identified from the tests. Not only was Machinex intimately familiar with the current system, it also had a comprehensive understanding of packaging and recycling trends affecting the market.

“Machinex has been our partner in the development of new processes and methodologies to enhance our facility performance,” says Veilleux. “As usual, they were honest from the start about the advantages of each technology, and they had an open mind about what we were trying to accomplish while maintaining some sort of budget to ensure a reasonable payback.”

The decision to make improvements was made in the first quarter of 2017, and BRA opted for an installation in the last quarter of 2017. Machinex had a two-week window to make the upgrade happen.

“Machinex met our installation window of two weeks by having crews working around the clock until the project was completed,” Veilleux says. “They carefully planned the integration into our existing system and the impact on the rest of the equipment. Every part of the upgrade was planned and triple checked to ensure an efficient demo phase, install and startup.”

The installation included an upgrade of the Machinex OCC screen to a larger one with larger shafts to reduce wrapping and improve performance. The ONP screen was replaced with a MACH Hyspec optical sorter. Machinex not only listened to BRA but also offered expert advice even when it differed from what the client had in mind.

“Our initial focus was on ballistic separators without much focus on the optical sorter, but they showed us the options, and it became evident what our direction needed to be,” Veilleux recalls.

The optical sorter cleans the ONP by removing the metals, plastic film, brown cartons and cardboard out of the stream. It was the exact solution BRA needed.

Worth the investment

Now, a few months into working with the new MACH Hyspec optical sorter and Machinex OCC screen, Veilleux is seeing the results he was hoping for.

“The upgrade was well worth it,” he says. “We have improved the quality of all of our commodities because every piece of technology is doing what it was designed to do and none of them are overloaded.”

And the upgrade accomplished everything BRA was hoping to do. “We have minimized the production of mixed paper, and we have increased the production of quality ONP and OCC that meets and exceeds the new China requirements,” Veilleux says.

Would Veilleux work with Machinex again? “Absolutely,” he says. “They are simply the best in the industry.”

He elaborates by saying, “They have the ability to simplify a very complex system with user-friendly interfaces, and they are passionate about harnessing every bit of efficiency from all the components provided.”

1 877 362 3281, sales@machinextechnologies.com, www.machinextechnologies.com