The View from Here

The spring convention season brought recyclers to Chicago and Monte Carlo for industry events.

The spring convention seasons kept recyclers busy on both sides of the Atlantic. The private and public sector gathered in Chicago at Waste Expo May 5-8. This year marked the 40th anniversary of the event, which featured three days of educational programming as well as an exhibit hall showcasing the products and services of more than 500 exhibitors.

The international recycling community met in June in Monte Carlo, Monaco, at the World Recycling Conference & Exposition, the Bureau of International Recycling’s (BIR’s) spring event. The June 2-4 event also marked a milestone for the international recycling association—its 60th anniversary.

Attendees at both events had plenty to talk about, from commodity market trends to transportation to legislation.

PAPER TRAIL

Global demand has created a strong market for recovered paper, with increasing production numbers and prices worldwide, according to George Brabec, a brokerage manager for Weyerhaeuser, based in Federal Way, Wash., who spoke on a panel addressing paper recycling trends at Waste Expo.

"It’s been a great couple years in paper markets," he said, adding that recent years had brought dramatic changes in the way paper was traded around the world.

Not only were prices up, but recycling rates were also at record highs, Brabec said, citing the recent figures released by the Washington, D.C.-based American Forest & Paper Association (AF&PA). The AF&PA reported a 56 percent recycling rate in 2007, surpassing the association’s stated goal of 55 percent by 2012. Brabec said a new goal of 60 percent has been set for 2012. "The goals are obtainable," he said. "The paper is there."

While the market has been strong, certain economic conditions on the horizon posed threats to future growth, Brabec said, including rising fuel costs and high rates for container shipping. "At one time, the U.S. provided about 71 percent of China’s fiber needs," he said. "Now, that’s about 45 percent." Brabec said China is turning to other countries to supply recovered fiber because of the dramatic increase in container rates from the U.S.

Transportation issues had led to market volatility, but conditions were expected to remain strong, Brabec said. "We have never seen a better time than right now for paper markets," he added.

What volatility the market had experienced was upward, added Bill Moore of Moore & Associates, Atlanta, who also served on the panel. Moore addressed several different grades of recovered paper, adding that one of the biggest changes the market had seen recently was the increase in the value of mixed paper. "Mixed has changed," Moore said, adding that at one time, the grade’s price ran at 20 percent to 30 percent of the price of old corrugated containers (OCC). Now, mixed trades from 50 percent to 60 percent of OCC. In Europe, the price could be even higher, sometimes as much as 80 percent, he said. Domestic mills may still have a difficult time using mixed paper, but export demand had fueled the grade’s growth, Moore said. "We used to avoid mixed paper—today, it’s a grade you pack on purpose."

Across the market, Moore said prices should be expected to soften slightly later in 2008, though the slight correction would be nothing like the price plummet the market experienced in the mid-1990s.

Paper has achieved record recovery; however, other materials like plastic were still lagging, raising questions as to how to best boost collection.

DEBATING BOTTLE BILLS

Eleven states have adopted refundable container deposit legislation, and the merits of such laws are still being debated as some states consider expanding their bottle bills.

Two speakers addressed the topic at a Waste Expo session called "Bottle Bills: Pro or Con."

According to Betty McLaughlin of the Container Recycling Institute, Glastonbury, Conn., who discussed the merits of bottle bills, such legislation was designed to control litter and increase recycling rates. McLaughlin said that to be successful, any recycling program must address collection, processing and end use. "People tend to get hung up on collection," she said. "Collection, processing and end us all must be strong, or your recycling program won’t work."

According to McLaughlin, bottle bills could help in all three areas of the recycling process. Refundable deposits increased participation, which helped increase collection and provided high-quality materials to processors, which benefited them as well as the end users, she said.

However, the argument could be made that "bottle bills conflict with a better way" of recycling by targeting beverage containers only, according to Judith Thorman from the American Beverage Association, Washington. Beverage containers make up a small portion of the waste stream, which suggests to some that the costs of such programs outweigh their potential benefits. "They’re very expensive and not very effective," she said.

Thorman said that a better approach would be a coordinated effort between the packaging industry and curbside recycling programs. The packaging industry should concentrate on making readily recyclable packages for the beverage industry and in other sectors, she said.

Thorman also said that making efforts to collect more material from underserved sectors also would be a more effective way to increase recycling. For instance, she said the workplace represented a sizable underserved opportunity when it comes to beverage containers. "A lot of consumption happens there," Thorman said. "But there are not a lot of places to recycle."

Bottle bills had the right idea, but may not be the most efficient way to achieve the goals their proponents had in mind, Thorman said. "How you recycle matters."

Legislative questions about how to best recover material are increasingly important in a global recycling market with growing demand for recyclables.

ELV TARGET GETS TOUGHER

The European Union’s End of Life Vehicle directive (ELV) has set firm targets for automobile recycling, with targets aiming higher as time passes. The directive "has caused much controversy and raised concern in the auto the recycling industries," noted Jens Hempel-Hansen, a Danish scrap recycler who moderated a session on the ELV Directive at the BIR’s World Recycling Conference & Exhibition.

Session attendees heard from two French automakers and a French scrap company about that nation’s experience in complying with the ELV Directive.

Manuel Burnand of scrap company Derichebourg reported that French dismantlers and scrap recyclers were recycling between 82 percent and 83 percent of the content of ELVs being generated in France. Reaching the initial ELV target of 85 percent, therefore, would not be difficult, he said.

To reach the next target of 95 percent in the year 2015, however, will require research and investment into recycling the plastic portion of obsolete vehicles. "R&D on ASR is still needed," said Burnand.

Rozenn Leborgne of automaker PSA Peugeot Citroen said her company was taking its role in reaching the 95 percent target seriously. "It is our responsibility as automobile designers," she stated.

She held out as part of that solution that her company was using more recycled-content plastics, with this being a "main action in the 2008 sustainable development plan" of the company.

PSA Peugeot Citroen’s approach has been to work with existing auto dismantlers and scrap companies to boost recycling levels. "We, as a car manufacturer, are not a professional on the treatment of ELVs. Operators have existed for many years even before the ELV directive, and their [business] is profitable and will remain so," she said.

Rival automaker Renault has taken a more direct approach, forming joint ventures and striking other formal arrangements with auto dismantlers and recycling companies.

"Dismantling and shredding are both necessary and complimentary," Renault’s J.P. Hermine told attendees.

The automaker is convinced that the metals portion of ELVs has a stable market, but more research is needed for plastics. Like PSA, Renault is using more recycled-content plastic, including 17 percent of the plastic in its Laguna III model (more than 100 components with recycled content plastic).

With plastics, elastomers and foam making up an estimated 17 percent of the ELV stream, reaching the 95 percent target involves plastic-based efforts, said Hermine. "Plastics recycling and glass (window) recycling are the major challenges for the future," he stated.

Two equipment makers who were present each predicted that the technology to sort shredded plastic is advancing. "I think technology is not too far away [to] seriously enhance the recycling of shredder residue," said Michael Bevan of the German office of optical sorting equipment manufacturer TiTech.

Scott Newell of The Shredder Co., based in the United States, also expressed confidence that "technology is being developed to separate the plastic post-shredder. I predict you will see that to a big extent," he remarked, though adding that recyclers will have to be convinced there was a return on any such investment.

The outlook for the stainless steel market appears positive on balance as 2008 progresses.

MOSTLY SUNNY FOR STAINLESS

After experiencing a volatile 2007, the stainless steel industry is likely to enjoy a less turbulent 2008, according to industry analyst Markus Moll of SMR in Austria.

Presenting at the BIR Stainless Steel & Special Alloys session titled "Mostly Sunny with Local Showers," Moll said the 2007 inventory de-stocking that caused the turbulence last year was now over.

2008 should be a year of growth for most producers of stainless steel, according to Moll, who also projected steady growth in stainless steel production through 2012. Producers in the U.S. were in a good position to export right now because of the weak dollar and "investments in efficient mill technology," he said.

The high cost of nickel has caused considerable exploration and some shifting to 200 series and 400 series products and away from 300 series grades. But Moll remarked that this trend may have peaked. "The cost advantages of 201 or 430 production are decreasing as chromium prices increase," he said, predicting a "renaissance" for 304 stainless.

He noted that different participants in the supply chain, ranging from steel service centers to scrap yards to melt shops, have also discovered hidden costs in trying to adopt new processes or find additional storage space for 200 and 400 series metals and feedstocks for such metals.

Moll said despite local showers (such as less than stellar economies in the U.S. and Japan), the outlook for stainless steel was mostly sunny for the rest of 2008.

In regional reports, Michael Wright of the ELG Metals office in Sheffield, United Kingdom, referred to the first five months of 2008 as stable, building on the fourth quarter of 2007 when the market recovered from its mid-year collapse.

Barry Hunter of Hunter Metals in the United States said logistics and shipping problems were on the minds of American recyclers, as containers remained difficult to procure. Asian mills had been buying subsequently less material, even from the Western U.S., where stainless scrap typically flows to Taiwan and China.

Ahmad Al Sharif of the Amman, Jordan, office of Sharif Metals, said the active petroleum industry in the Middle East as well as a booming construction market were helping to generate considerable amounts of nickel-chrome tube scrap and other forms of scrap.

Scrap is still being generated in Russia, according to Ildar Neverov of Scrap Market Ltd., but less is being exported. He said some 320,000 tons of stainless scrap was exported from Russia in 2005, but only 200,000 tons in 2007 in a trend toward less exporting that is likely to continue.

A report submitted by Stuart Freilich of Universal Metal Corp. of the United States noted that production snags for the Airbus A380 and Boeing 787 had caused a noticeable decline in demand for titanium and titanium scrap. "Demand will probably not strengthen until late 2009 or even 2010," commented Barry Hunter, who read Freilich’s report.

Ferrous scrap, however, is enjoying healthy demand and pricing.

FOLLOWING THE CHAIN

The demand for and high price of ferrous scrap is likely to continue as long as the construction booms in the Middle East and China require a steady dose of steel.

Speaking to delegates at the BIR Ferrous Division session, Anton Van Genuchten of Germany’s TSR GmbH & Co. pointed to the healthy operating environment for steelmakers as a key reason for record-high pricing. "This pricing is based on very firm worldwide demand," he said.

The editorial staff of Recycling Today contributed to this article.

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