Demand and pricing remain healthy for many grades of plastic scrap, says Vince Gupta, president of Prime Plastic Products Inc., Vista, California. He describes demand for the polyolefin grades he primarily deals in as being “enormously strong” and “strongly outstripping supply.”
Gupta says all the polyethylene grades he deals in “are on fire” in terms of demand and pricing. In fact, he adds, “All commodity grades have taken off.”
Keng Baloco-Wong, who manages product sales and logistics for the material recovery facilities (MRFs) operated by Athens Services, headquartered in City of Industry, California, also notes the strong demand for plastic scrap. “We have seen an increase recently in domestic demand for postconsumer grades,” she says. “An uptick in price has followed, which is refreshing. For the first few months of the pandemic, demand and pricing both were depressed,” she adds.
”We are able to sell all of our material in North America, but this summer and fall it was very difficult to move PET, despite public commitments by brands to purchase more recycled content.” – Miriam Holsinger, vice president of operations and business intelligence, Eureka Recycling
Scott Saunders, general manager of the high-density polyethylene (HDPE) and polypropylene (PP) reclaimer KW Plastics, Troy, Alabama, says supplies of HDPE and PP scrap have tightened as collections were delayed by the winter weather that affected much of the country in mid-February. Demand for postconsumer resin also has risen in light of the weather-related shutdowns that affected the petrochemical sector in Texas, reducing supplies of virgin plastics and increasing prices.
In addition to the mid-February weather, ongoing issues with trucking and shipping container availability are hindering the movement of material.
“Movement has been a challenge the past few months for both export and domestic,” Baloco-Wong says. “We are dealing with equipment shortages, congestion and vessel delays,” she says of ocean shipping.
She says export demand is strong. “Taiwan and Korea are active buyers; however, Malaysia is the strongest market in Southeast Asia. There are also smaller outlets in South America, but Southeast Asia is the strongest market.”
Miriam Holsinger, vice president of operations and business intelligence with Eureka Recycling, which operates a MRF in Minneapolis, says, “We are able to sell all of our material in North America, but this summer and fall it was very difficult to move PET (polyethylene terephthalate), despite public commitments by brands to purchase more recycled content.”
While pricing for recycled PET has been high, it has not helped reclaimer CarbonLite Holdings LLC, headquartered in Los Angeles. That company, which has facilities in Riverside, California; Dallas; and Reading, Pennsylvania, announced March 8 that it filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. CarbonLite cites pressures related to the coronavirus pandemic, including temporary production slowdowns caused by employee illness and the low price of virgin plastic relative to recycled PET, as factors.
Some suppliers to the company have said it has been slow to pay prior to 2020, however.
“With CarbonLite out of the market, there will be a temporary disruption in California and Texas in the movement of PET in surrounding areas,” Baloco-Wong says. “However, we are seeing a strong demand overall for PET, both overseas and in other domestic outlets.”
Rotar International BV, a Netherlands-based manufacturer of hydraulic attachments for the demolition, recycling and scrap metal industries, has released its RSQ-full hydraulic quick-coupler adapter. The RSQ-full adapters:
feature redesigned rotator heads
are built directly into the slewing ring, and the bolted hammer-top plate disappears completely
can be nearly 8 inches shorter and up to 400 pounds lighter, depending on the attachment size, than traditional hammer-top plates
improve the stability of the attachment’s carrier because of the favorable center of gravity
come with a service inspection cover, providing easy access to components in the upper section of the attachment
Highland, New York-based Air Cleaning Blowers LLC says it has developed and patented a series of technologies, named Air Cleaning Blowers or ACBs, that enable a blower to clean the air without using a filter element that clogs and constantly needs replacing. ACBs:
ventilate, pressurize and clean particles from dusty air without using any filter elements
help reduce the costs and complications of providing ventilation in industrial settings
are simpler to size and use than systems with ordinary air filters and air purifiers
provide constant and predictable airflow, air pressure, air quality and energy consumption
can be used in applications with airflows that range from 50 to 3,500 cubic feet per minute
can serve as prefilters for specialized downstream filters
Thermo Fisher Scientific, Tewksbury, Massachusetts, has launched its Niton XL5 Plus hand-held X-ray fluorescence (XRF) analyzer, which provides lab-quality elemental analysis. The Niton XL5 Plus:
offers users a small, lightweight and portable design, weighing only 2.8 pounds
features updated software and improved detector technology to provide accuracy when analyzing light elements as well as heavy metals
includes a detector protection feature to reduce the risk of damage to the detector window, boosting its durability, particularly in recycling and scrap metal settings
enables users to perform elemental analysis in hard-to-maneuver workspaces
Cleaning up contamination in its residential recycling program has been a goal for the community of Wausau, Wisconsin, ever since it performed a waste audit about two years ago.
According to a news release from the city of Wausau, its October 2019 waste audit showed that 84 percent of residential recycling carts contained contamination.
“When residents don’t put the correct materials in their recycling carts, we undermine the entire purpose of our local recycling program,” says MaryAnne Groat, Wausau’s finance director and recycling coordinator. “Those unacceptable materials simply take an expensive trip from the home to the recycling facility and then onto a landfill.”
As a result, the city’s Sustainability, Energy and Environment Committee voted in favor of bringing its residents more education about proper recycling. One way it’s doing that is through a web-based app called Betterbin, which the city officially launched Feb. 15.
Michelle Goetsch, who is the CEO of Wisconsin-based Betterbin, launched her business in 2018 with the idea that data and technology could change the way consumers learn how to properly dispose of packaging material. She says her goal was to provide consumers locally accurate recycling instructions for brand-specific products.
Goetsch says she had no experience in the recycling industry when she started her business but adds that she was passionate about improving sustainable waste management in communities and knew recycling education could be better. She says she had many conversations with solid waste management experts and material recovery facility (MRF) operators to learn about the complexities of the material recovery ecosystem in the United States when building Betterbin.
Since its launch in 2018, Goetsch says pilot implementations of the app have taken place in multiple communities, college campuses and at an Airbnb location.
“We are a startup, but we’ve done multiple pilot implementations to iterate on our machine learning technology as well as how to increase user engagement. [Betterbin is still] a pilot in the sense that our technology will only continue to get better, and we’ve only just embarked on partnerships with brands who want to use our platform as a way to reach environmentally responsible consumers,” she says. “At this point, it’s functioning at a high level, and it’s been fun to see user analytics to understand where consumers have the most questions and their willingness to want to learn more.”
Over the past year, Wausau and the MRF that receives its materials worked with Betterbin to develop the guidelines and content that were loaded into Betterbin’s web-based app, ensuring it would provide the right instructions for residents on what and how to recycle. “The app looks specifically at what’s accepted for Wausau residents when materials to go our MRF,” Groat says.
Goetsch adds that Betterbin is a “web-based app,” meaning it’s a website that can be accessed on computer or smartphone browsers without users having to commit to downloading an actual app.
“We intentionally have initially offered only a web-based app,” she says. “The biggest reasons we’re set up that way is because it’s a hard ask to get someone to download something on their phone, especially if they’re not overly passionate about recycling.
She continues, “A web-based app is more accessible—you can use it on a desktop, or on the go if you’re staying overnight at a travel destination, but it looks and functions just like an app on your mobile device.”
By scanning a barcode or typing the product into the web-based app, a resident can see if the item is recyclable.
Wisconsin-based Rocket Industrial, a packaging solutions provider, also helped to provide funding for Wausau to create the educational app with Betterbin. “As a provider of packaging solutions to brands internationally, we see it as our responsibility to divert as much recyclable packaging from landfills as possible,” says Ryan Gallagher, president of Rocket Industrial. “Seeing firsthand the contamination issues locally helps us better serve our customers across the country. The opportunity to support a local entrepreneur [to] solve a problem in our own community is the icing on the cake.”
Near-term goals
Groat says the city plans to monitor contamination in its residential recycling program.
Betterbin’s Goetsch says her team also will provide Wausau with additional promotional materials for residents, such as mailers that can be sent with water bills and messaging the city can share on social media. She adds that the Betterbin web-based app features a “tips and tricks” section with monthly themed content, such as details on how to recycle pet food packaging and giveaways of gift cards from local businesses.
”We have a vision of working directly with [stakeholders] to properly educate people on recycling.” – Michelle Goetsch, CEO, Betterbin
Groat adds that she is hopeful that the new web-based app will give residents the educational components they need to recycle right. She says she also hopes it will encourage more residents to make better purchases initially.
“I think this can help people make better decisions to ‘prerecycle,’” she says. “For instance, I try to purchase things that have less packaging.”
Goetsch says Betterbin’s goal is to serve any individual, building or community with contracted recycling services. “There is a lot of room for improvement in helping consumers recycle properly,” she says. “We have a vision of working directly with brands, MRF operators and local stakeholders to properly educate people on recycling, composting and food waste prevention but also the critical concepts of reducing, reusing and being a responsible consumer.”
She continues, “It’s hard for a consumer to go to a grocery store and know what packaging is sustainable or recyclable. We have this goal of being a platform and a data pool to help consumers make purchasing and disposal decisions with environmental and human health at the forefront of their mind.”
The author is managing editor of Recycling Today and can be reached at msmalley@gie.net.
An upbeat start
Features - Steel Industry Update
The steel industry benefits from rising demand amid a supply shortage and prospects of infrastructure stimulus.
The steel industry has kicked off 2021 on a high note, building on the strong recovery that started in the final quarter of 2020. Shares of major steel companies were heading higher in January. The momentum has been driven by surging steel prices on the back of rising steel demand amid a supply shortage and prospects of infrastructure stimulus packages this year from the Biden administration.
Material stocks got a thrust after the United States Congress formally certified Joe Biden as the 46th president Jan. 20. Biden has proposed spending $2 trillion over four years to boost clean energy and rebuild infrastructure. The planned investment includes building and repairing roads, bridges, water systems, electricity grids and broadband aimed at fixing America’s “crumbling” infrastructure.
Stocks make gains
American steel stocks were making gains in January on hopes that the sizable infrastructure spending would have a beneficial effect on the U.S. steel industry given the expected increase in consumption of steel, which is used to make almost everything from rail tracks to roads to bridges.
Notably, shares of major U.S. steelmakers, such as United States Steel Corp., Nucor Corp., Steel Dynamics Inc. and Cleveland-Cliffs Inc., the last of which completed the acquisitions of AK Steel and ArcelorMittal USA last year, were up roughly 37 percent, 7 percent, 9 percent and 24 percent, respectively, in January.
The optimism can be gauged from the fact that the Zacks Steel Producers industry stocks gained 10.6 percent in January, outperforming the S&P 500 Index’s 1.9 percent appreciation.
The steel industry has been urging for an infrastructure package since the early days of the pandemic. Leading U.S. steel industry groups in March 2020 called on Congress to include significant infrastructure investment in the next stimulus package to help the nation recover from the fallout of the deadly virus outbreak.
The pandemic-induced demand destruction put a crimp on the steel industry for much of the first half of 2020. However, an upturn in demand from key industries such as automotive and construction and an upswing in steel prices have pulled the industry out of its funk. Automotive and construction together account for a big chunk of steel consumption.
Momentum grows
Recovery started to gain steam toward the end of the third quarter of 2020 on resumption of operations across major steel-consuming sectors following the easing of lockdowns and restrictions across the world.
Steel prices also are shooting higher on an upturn in demand. Steel stocks started to rebound in the second half of 2020 after getting hammered during the first half along with most other commodities amid the pandemic-led demand slowdown.
Steelmakers are seeing strong order booking in automotive. Recovery in the automotive industry has accelerated in light of strong customer demand following pandemic-led shutdowns. The automotive rebound is driving demand for flat steel products globally.
A key reason behind the spurt in steel prices is the demand-supply imbalance.
Moreover, the revival in the global construction sector is driving demand for long and flat steel products in this major market. The construction sector also has bounced back on the heels of a resumption of projects that were stalled earlier in light of supply chain disruptions and manpower shortages. In particular, the nonresidential construction market remains resilient.
Meanwhile, a strong recovery in construction and manufacturing activities is driving demand for steel in China, the world’s top consumer of the commodity. Steel demand is being driven by China’s government spending in infrastructure projects. A rebound in China’s demand has instilled optimism in the steel space.
Steel prices are on an upswing on the back of rising demand, supply shortages and higher raw material costs. Notably, U.S. steel prices have staged a strong recovery and hit record levels after cratering to pandemic-induced multiyear lows in August 2020. Benchmark hot-rolled coil (“HRC”) prices started to recover in September and have been screaming higher since then. Prices zoomed past $900 per short ton in December 2020 on U.S. steel mills’ price-hike actions, tight supply and rising demand, and were hovering near the $1,000 per short ton level last attained in January 2008. In fact, HRC prices have catapulted to levels not seen in more than 10 years and doubled the lows witnessed in August. (Editor’s note: Fastmarkets AMM’s daily steel hot-rolled coil index, FOB U.S. mill, was calculated $1,285 per short ton March 12.)
Demand-supply imbalance
A key reason behind the spurt in steel prices is the demand-supply imbalance. Lead times for steel delivery at U.S. steel mills remain extended, indicating healthier demand. Moreover, supply remains restricted because of the idling of blast furnaces and production disruptions associated with mill outages. These coupled with lower steel imports arising from the pandemic and tariffs have resulted in the tightening of steel supplies, a situation which is likely to sustain over the short haul.
Steel scrap prices are also on the rise amid tight supply. As such, there is room for further upside in HRC prices as the fundamentals driving factors remain in place.
Higher demand, elevated input costs and supply constraints are likely to continue lending support to HRC prices over the near term. Higher prices would drive profitability and cash flows of steel companies.
This article is reprinted with permission from Zacks Investment Research, Chicago. For more information, visit www.zacks.com.
Striving for consistent, reliable and predictable rail service
Features - Transportation Focus
There’s some good news regarding railroad performance, but there’s still room for much improvement.
“A major win for the scrap industry.” That is how the Institute of Scrap Recycling Industries (ISRI), Washington, characterized a Surface Transportation Board (STB) ruling in April 2020. This ruling was in response to presentations to the board by rail shippers concerned with rail service and charges.
In the midst of and in spite of COVID-19, did the scrap industry see a major win with the railroads in 2020? What are some of the issues shippers of all products faced that drew a hearing by the STB? While demurrage in general was a major driver for the April 2020 ruling, several issues have been of growing concern to customers:
demurrage charges increasing;
changes in demurrage rules reducing the time to load or unload before charges begin;
a decline in operations service;
increasing freight rates;
growing inaccuracy of demurrage and freight bills;
poor response from carrier customer service and sales; and
excessive charges for canceling unit trains within a 48-hour window.
With the STB’s April 2020 ruling, it might seem odd that issues and changes have surged suddenly. Recyclers might be wondering what remedies have been proposed and enacted since this “major win,” as ISRI calls it.
Basics of rail shipping
The rail freight network in North America is one of the most capital-intensive industries in the world. It is self-sufficient in that the arteries through which its commerce run are owned and maintained by the railroads themselves.
Although it has oversight from agencies such as the STB and the Federal Railroad Administration, much of how the rail freight network operates is governed by its own organization that is managed and run by Class I rail executives, the Washington-based Association of American Railroads.
Government oversight, if done for the common public good, can require changes of a significant financial magnitude that the carriers must pay for themselves. Most recently, positive train control (PTC) was required on specified freight and passenger railroad route miles. Carriers had to implement this technology at costs originally estimated at $10 billion.
As a result, the rail carriers seek to drive efficiency into the network to remove costs and improve service. In the last few years, the late railway executive Hunter Harrison initiated a new way to operate and manage railroads: precision scheduled railroading (PSR). The stated goal of PSR is to benefit customers by providing consistent, reliable and predictable service. When successful, fewer rail cars are needed, planning is enhanced along the supply chain, costs are reduced, freight rates can be adjusted and everyone is happy.
If we look at a full cycle of how a rail car ships, it involves three players: the shipper, the rail carrier and the customer or consignee. Each player has a role in creating the desired efficiency, and how they each manage their segment impacts the whole. While not exhaustive, here are some of the actions each party controls:
Shippers properly manage car orders (or private fleets); ensure clear and safe track capacity for cars when placement is needed; order cars for placement; load promptly upon placement; release shipments and issue bills of lading upon loading; and ensure switch crew access to pull cars safely.
Carriers keep shippers and consignees informed of rail car status, including any demurrage accrual; supply all required rail cars as ordered and on schedule; process, release and create waybills promptly and accurately; pull and place rail cars on schedule and consistently; move cars through the rail network from origin to destination safely, reliably, consistently and on schedule; issue accurate and timely freight bills; issue accurate and timely demurrage or other accessorial bills; communicate any issues clearly and promptly; and resolve any delays or schedule deviations quickly.
Consignees ensure clear and safe track capacity for cars when placement is needed; order cars in upon arrival (if closed-gate); unload promptly upon placement; release empty upon unloading; and ensure switch crew access to pull cars safely.
For the rail customer, whether shipper or consignee, the key question is how well the carrier is managing all the time it is in its care. Another way to put it is how good is the service that the carrier has claimed is improving specifically because of PSR.
A C+ at best
In an article written by Jim Blaze and published in Railway Age in February 2021, the author looks beyond the rhetoric of the parties involved and offers some data. The very title of his article provides a clue to his conclusion: “Railroad Service Improvement Perhaps a C+.” Blaze writes, “The benefits that PSR was to eventually give as cost savings to customer supply chains are floundering. The improvement isn’t always continuous.”
The goal of PSR is to deliver consistent, reliable and predictable service. And if that service includes at least all the items listed under carrier responsibility, how well have they delivered that service?
Union Pacific reports its carload performance for 2020 by quarter as 64 percent, 76 percent, 72 percent and 74 percent. Intermodal was reported as 85 percent, 82 percent, 77 percent and 83 percent. CSX reports its carload performance as 81 percent, 80 percent, 73 percent and 75 percent and its intermodal performance as 96 percent, 94 percent, 87 percent and 84 percent. Is there a major win in these numbers? Hardly. These give some indication of the overall improvement or lack thereof.
In the spring 2020 STB ruling, the primary issue addressed was demurrage. In response, most Class I carriers made some adjustments to tariff rules and rates to ease the burden. Providing visibility with online tools for shippers is of great value. They potentially can monitor status throughout the month, contact the carrier via means provided to address discrepancies as they occur and take action as needed to keep cars moving to avoid charges. If the carrier makes billing updates, responds to questions and disputes and corrects erroneous bills promptly when identified, we have progress and improvement.
COVID-19 must be considered when evaluating how well the carriers respond to requests. When an issue or problem is identified, every delay in response creates a potential delay in the consistent, reliable and predictable service. With many if not most carriers’ customer service forces reduced from PSR and most contacts still working from home, the problem is exacerbated. This critical area has a significant impact on the goal of streamlining the process. As digital as the world has become, business still relies heavily on the most valuable resource: people. A great deal of room is left for improvement here.
A few years ago, the buzzword within the rail community was “first mile-last mile,” the recognition that the carriers do a fair job of getting cars moved hundreds of miles from origin to destination. But getting those cars placed for loading and unloading, pulled and handled locally for shipment (i.e., local switching) were the areas in need of the greatest improvement. Most of the focus on PSR has been on major and broad changes—removing hump yards, declassifying intermodal as a separate business to be operated differently, etc.—with less emphasis on the first and final mile involved. This is where demurrage surfaces, service schedules are missed and frustration builds. Without due consideration and emphasis on this, can shippers see a major win?
Finally, shippers and consignees, the railroad customers, do have control over key areas that can influence whether the rail industry is consistent, reliable and dependable. Anything less than rigorous attention to their areas only will lead to more frustration, poorer service and higher costs.
The author is president and CEO of Iron Horse Logistics, Aurora, Ohio, and president of the North East Association of Rail Shippers. To discuss this article further, contact him at dennis@ihlogistics.com.
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Megan Smalley
