Recycling industry’s response to COVID-19
Coronavirus cases spread to all 50 contiguous U.S. states on March 17.
Photo by Brian McGowan on Unsplash

Recycling industry’s response to COVID-19

Companies in the scrap industry are having to make changes to their businesses in response to the coronavirus spread in the U.S.

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The COVID-19 pandemic officially spread to all 50 states by Tuesday, March 17, according to the U.S. Centers for Disease Control. As of Thursday, March 19, a total of 10,442 cases have been reported in the U.S., plus the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands, with and 150 deaths. 

Companies in the recycling industry have responded to the coronavirus pandemic by adding formal or informal company policies on sick time and hygiene.  

“This kind of came up on us very quickly,” says Mark Zwilsky, CEO of Sterling, Virginia-based Potomac Metals. “We’ve been offering an extremely liberal leave policy right now.” 

Sarah Zwilsky, Mark’s daughter and the administrator at Potomac Metals, says the company had a managerial meeting March 17 to discuss what it would do for employees if the government requires Potomac Metals to shut its doors in response to the pandemic. She adds that the company is trying to be very transparent with employees on its actions. 

“Our employees are very concerned with what’s going to happen next,” she says. “With COVID-19, we are being transparent and upfront. We’ve offered some extra time off, a couple of extra paid days off. Then, we’re also wiping everything down and trying to provide guidelines in both Spanish and English for our employees. We’re trying to be careful, cautious and proactive with COVID-19.” 

Toledo, Ohio-based Kripke Enterprises Inc. also has released safety protocol to its employees during the third week of March to provide best practices, such as wearing latex gloves underneath work gloves, as COVID-19 can remain on cardboard for up to 12 hours and on metal surfaces for two to four days, the company reports.  

“We’re staying ahead of the curve as the coronavirus spreads through North America,” Kripke shared in its safety protocol. “As this unfolds, we will be taking the necessary precautions to minimize risk for all of us at [Kripke Metal Processing] when handling scrap.” 

At Dallas-based Texas Recycling, president and co-owner Joel Litman says his company has taken some precautions in response to COVID-19. He says the company shut down its buyback operation March 17 to eliminate face-to-face contact with individuals trying to drop off paper and metal scrap.  

“We got the word out to customers [March 16] this would be happening, so that day was good, and many people brought in material knowing we would be closed,” Litman says. 

As another precaution, Texas Recycling divided up its lunch to four shifts to reduce the number of people using the lunchroom at a single time. “We also have a companywide production meeting every morning at 9:15 with 30 people, but we disbanded that and do that in much smaller groups,” he says. 

Litman adds that the company’s secure document destruction business has slowed since COVID-19 began to spread in the U.S. “On our shredding side, we are running into the situation of more schools and offices closing that we serve. This is affecting how much businesses are shredding,” he says.  

Some recycling collection centers have announced plans to close temporarily as of mid-March. California-based Humboldt Waste Management Authority (HWMA) announced the third week of March that its Eureka Recycling Center in Eureka, California, was closed until further notice as a precautionary measure following recommendations to prevent the spread of COVID-19.  

Ohio-based scrap processor Cohen reported March 16 that it was closing “all retail recycling locations to the general public” as of that day. 

“This in no way impacts the overall Cohen business, and we will continue to service all other commercial and industrial customers,” the company states. “This difficult decision comes after much deliberation and input from expert sources in the public and private sectors. Employees who work on the retail side of the business will be cross-trained in other areas of the operations to help ensure business continuity at each location.” 

Other companies have reassured that their businesses will remain operational, with Chesapeake Materials, Edgewater, Maryland, alerting its customers that the company “is still working remotely and here to help. Please let us know if there is anything we can do to assist you during these uncertain times.” The company adds, “We are still moving material, we are arranging quick payment terms with our suppliers who may need operating cash to help support their employees. We are supplying our manufacturers with materials to keep plants running and stores stocked with essentials. We ask that you work with us on delivery and pick up appointments as freight is more challenging than ever and we are doing our best to navigate through it. Please feel free to reach out to us for all and any needs. We are in this together and together we will come out the other side stronger.” 

The Washington-based Institute of Scrap Recycling Industries (ISRI) has communicated to its members that it is “working aggressively for our industry on the national stage in ways [individual recyclers] could not do alone.”

ISRI Paper Stock Industries Chapter President Leonard Zeid says on March 18 the association submitted a letter to Vice President Pence “requesting that recycling operations be designated ‘essential’ to public health and welfare, as well as to our nation’s economic infrastructure on the local, state, and national levels.”

Some demand escalates 

Litman adds, “Domestic demand [for recovered paper] is there, but now the question is supply—especially you’ll see demand from corrugated mills and mills that make tissue in the short term.” 

“I don’t know if it’s going to last, but the demand for paper is up right now due to the coronavirus,” adds Marty Davis of Moline, Illinois-based Midland Davis Corp. “Tissue business is good right now with all of the [sorted office paper], white ledger and coated book stock in better demand.” 

Recovered paper demand is rising from mills, according to a broker on the West Coast. However, he adds, generation of recovered paper by recyclers and material recovery facilities (MRFs) is dropping this month. 

“February always has low inbound generation, but March is usually a good rebound mark,” the broker on the West Coast says. “March is not rebounding. Inbound material, whether at commercial recycling plants or residential MRFs, is way off when it should be up.” 

While recovered paper demand is improving amid the pandemic, Davis adds that demand for ferrous scrap is declining. 

“This is having the opposite affect on the scrap iron market,” he says. “The market was expected to go up this month, and it didn’t. It has stayed the same. All expectations are that ferrous will be down, and down hard next month.”  

Aluminum supply chain to see effects 

While a trader for a scrap processing company based in the Midwest says he has not seen a coronavirus-related effect on supply and demand for aluminum scrap as of early March, he adds, “Certainly, it’s impacting the terminal markets given the increasing fear of a global slowdown in terms of manufacturing.” 

That fear was becoming more tangible as of mid-March, when automakers in Europe and the United States announced they would be halting production temporarily in response to the outbreak. While those announcements were made in mid-March, aluminum scrap processors and traders already were noticing that generation had slowed. 

“Scrap generation is a little slow but, overall, pretty steady,” an aluminum scrap broker based in the Midwest says. “Lower steel prices have hurt the flow of retail scrap, and recently coronavirus fears have slowed down some industrial production of scrap.”  

The trader for a scrap processing company based in the Midwest also points to a decrease in retail sales. “For the most part, we have seen our industrial sectors hold steady with slightly declining obsolete scrap coming into our yards,” he says. “The all-in value of most every product has discouraged a bit of that activity. But manufacturing sectors prevalent in our region remain pretty strong,” the trader says, citing auto, RV and boat manufacturers in particular. 

A source with a West Coast-based scrap processor says his company has seen a “slight slowdown in scrap generation,” which he attributes to trouble at Boeing and with the aerospace sector in general.  

In January, Boeing suspended manufacturing of its 737 Max planes, which have been grounded worldwide for a year following two fatal crashes. The company had manufactured 400 planes it was unable to deliver because of questions that remain regarding the crashes. 

On top of those issues with the 737 Max, Boeing has sought at least $60 billion to assist the aerospace industry as it struggles with declining demand arising from the coronavirus pandemic. 

However, he says his company sees China’s demand starting to ramp up with the country’s reclassification of some high-quality grades of scrap that is planned for July. 

While the fallout from the COVID-19 outbreak and its effect on the aluminum supply chain cannot yet be determined, sources are expecting it to be affected.   

“We feel it will be a four-to-six-week drought as an increasing amount of companies are looking to close or shutter,” the source on the West Coast says of aluminum scrap supply. “The effect is taking us into the second quarter, with stability in uptake in the second half of the year.” 

Updating the industry

Andy Golding, a trader at Kripke Enterprises Inc., Toledo, Ohio, told Recycling Today he created a Google Drive file for scrap processors to openly share their policies, protocols and crisis response plans with one another, which can be found here

Golding says he is encouraging scrap processors to add their protocols to this file. Interested companies can email him with that information at andy@kripke.com