Nonferrous Department

Aluminum Merger Pending

The Aluminum Company of America Inc. (Alcoa), Pittsburgh, has announced a $3.8 billion bid to acquire Alumax Inc., Atlanta. If the deal is approved by regulators and shareholders, it would create a company with annual revenues of $17 billion and nearly 100,000 employees working at 250 manufacturing plants and offices in 30 nations.

The deal would also combine two of the world’s largest consumers of aluminum scrap.

Preliminary comments from analysts were positive toward the deal, with many feeling each company had strengths in different aluminum product markets. That is certainly the view corporate officers have been offering as they have announced the deal. "This combination will create economic efficiency for customers by saving cost overlaps in management, marketing, transportation, and research and development while gaining additional new value through the combined technology and operating know-how of the employees," says Alcoa chairman and CEO Allen Born.

UBC 1997 Recycling Rate Moves Up

1997 proved to be a good year for aluminum UBC recycling, according to numbers released by three trade groups: The Aluminum Association Inc., Washington; the Can Manufacturers Institute, Washington; and the Institute of Scrap Recycling Industries Inc. (ISRI), Washington.

Both in terms of volume and percentage of cans purchased, more UBCs were collected and recycled in 1997 than in 1996. Some four billion additional UBCs were recycled in 1997 than the previous year (66.8 billion in 1997 vs. 62.8 billion in 1996). The recycling rate also increased from 63.5% in 1996 to 66.5% last year.

The increased UBC recycling "demonstrates that a partnership of manufacturers, recyclers and the public can reach impressive goals that are good for both business and the environment," says ISRI director of commodities Robert Garino.

Among individual companies, Anheuser-Busch, St. Louis, may have been the largest UBC consumer with just less than 325,000 tons consumed, a figure that represents more than 32% of total beverage cans recycled in this country.

Alcan Aluminum Corp., Cleveland, says it was responsible for consuming 287,500 tons of UBCs in 1997, or more than 28% of the U.S. total. And Reynolds Metals consumed just less than 200,000 tons, or almost 20% of the country's total.

At least one detractor has come forward, however, contending the 66.5% figure might be an inflated one. "The growing number of imported scrap aluminum cans (about 70% of these coming from Mexico and Canada) skews the rate," says Pat Franklin, executive director of the Container Recycling Institute, Arlington, Va. Franklin claims that if the imported tonnage is not included, the actual UBC recycling rate drops to 59.1%.

"This is not an aluminum can bashing effort on our part," remarks Franklin, "and certainly we are not denying the fact that aluminum cans are the most recyclable and recycled package bar none. Our goal is to get the truth about beverage container recycling to the public, and the truth is, the recycling rate for aluminum cans sold in the U.S. in 1997—while substantially higher than that for glass or plastic bottles—was 59.1%, not 66.5%."

Separately, the Aluminum Association has also announced an average UBC recycled content rate of 54.7%, which it claims is the highest recycled content percentage of all packaging materials.

Nickel Staggering Out of the Gate

Neither the new year nor thoughts of spring have cured what ails scrap nickel processors. But many processors are hopeful that decreased mine production by Canadian nickel producer Inco Ltd., Toronto, might boost scrap demand and pricing. The boost is needed, however, since pricing has been depressed in 1996, 1997 and into 1998. Many analysts point to unexpected output increases at Russian giant Norilsk as the latest factor keeping scrap nickel and stainless steel prices low. Analysts at Bear Stearns, New York, released a report predicting nickel will bounce back in 1998 to as high as $2.75 per pound. As of mid-April, nickel was trading in the $2.50 per pound range. Even the $2.75 figure is well below the $3.19 per pound pricing averaged in 1997 and the $3.78 reached in March of 1997.

Nickel Scrap Consumption Up Dramatically in '97

More than 10,000 additional metric tons of scrap nickel and nickel-alloyed material was consumed in the U.S. in 1997 compared to the year before. Nickel found in ferrous scrap made up the entire increase, according to the U.S. Geological Survey, as slightly less nonferrous nickel was consumed in 1997. The trend appeared to be continuing at year’s end, with steel mills consuming 7% more primary and secondary nickel in December of 1997 than they did the month before.

Gold Prices Spurs Demand

Perhaps demonstrating that age-old laws of economics still remain in effect as the year 2000 approaches, demand for gold increased sharply in 1997 as its price plunged.

Worldwide consumption of gold rose 16 percent in 1997, according to Gold Fields Mineral Services (GFMS), London. The 1997 increase in demand—in terms of volume—came primarily from jewelry makers in India, as well as gold jewelry makers in the Middle East and Europe.

Hewlett-Packard Opens Metal Separation Plant

Hewlett-Packard Co., Palo Alto, Calif., and Noranda Inc., Toronto, have opened a metal separation plant designed to sort and recover recyclable materials from computers and other electronic hardware. Hewlett-Packard and the Micro Metallics subsidiary of Noranda say the new facility is unique in both its "size and ability to process a diverse stream of electronic hardware and other materials." Potentially recyclable materials commonly found within the computer hardware to be processed include gold and silver as well as copper, steel and plastic polymers.