Scrap Industry News

PUBLIC SCRAP COMPANIES STRUGGLE

Recycling Industries Inc., Englewood, Colo., has announced a fiscal year net loss of more than $38 million for the year ending September 30, 1998. The scrap metal consolidating company joins Philip Services Corp., Hamilton, Ontario, and Metal Management Inc., Chicago, in announcing major losses as a result of the difficult ferrous scrap trading climate of 1998.

“These have been some of the most challenging times in the history of our industry,” says Recycling Industries chairman and CEO Thomas J. Wiens. “The decline in the average sales price of ferrous and nonferrous materials and the decrease in volumes have had a significant effect on our company.”

Metal Management announced a $15.7 million loss for the quarter ending September 30, 1998, while Philip Services was not profitable throughout 1998.

Commercial Metals Co. (CMC), Dallas, has been able to buck the trend toward losses. CMC president and CEO Stanley A. Rabin credits the company’s steelmaking operations as the main factor in the $11 million dollar profit posted by the company for the quarter ending November 30, 1998.

“Our four [steel] mills showed a 34% increase in operating profit despite a 20% decline in shipments,” says Rabin. “A major factor was that margins held up well,” adds Rabin, who also mentions that scrap purchasing costs were down $31 per ton.

Despite the scrap market’s woes, Rabin says that CMC’s “operating income for the Marketing and Trading segment was 37% higher than last year’s first quarter while revenues were up a more moderate 7%, a continuing accomplishment for this segment amid the collapse of global markets and the extraordinary drop in world prices.”

Another integrated scrap and steel company, Schnitzer Steel Industries Inc., Portland, Ore., has reported a $1.6 million loss for the quarter ending November 30, 1998. “Our results for the . . . quarter reflect the impact of the Asian financial crisis on our earnings from both our Scrap and Steel Operations,” says Schnitzer president Robert W. Philip. Schnitzer’s scrap operations posted a $400,000 loss for the quarter.

NEW HOPE FOR FLUFF?

A research team with members from USCAR’s Vehicle Recycling Partnership, Southfield, Mich., the American Plastics Council, Washington, and a Utah plastics company is researching a method to recover and recycle the plastic portion of automotive shredder residue (ASR), or fluff.

While the researchers are confident their “skin flotation” method can work, they are not as certain whether it can be a cost-effective way to process fluff.

“If it’s more expensive to recycle a part than it is to send it to a landfill, then the vehicle recycling infrastructure will choose the cheaper method—sending it to a landfill—which causes environmental strain,” says Gerald Winslow of USCAR.

The skin flotation process is being researched at a facility operated by Recovery Plastics International (RPI) of Salt Lake City, Utah. RPI and the two trade groups have processed 80 tons of plastics culled from auto shredder residue over a six-month span, with the long-term goal of developing reusable plastic materials from the ASR stream. (Rubber recovery is also being assessed as part of the project.)

The process—which involves water separation followed by an air aspiration process—is billed by USCAR as “slightly more expensive and time consuming than necessary to make it commercially viable.” Winslow says the researchers are optimistic that “the process, with further research, will be cost-effective and feasible for the automotive industry.”

CRUSHED CAR TRANSPORT RULES A CONCERN

An effort by the U.S. and Canadian governments to define how crushed auto hulks can be transported by truck has some scrap recyclers concerned. Officials from both nations drafted a set of regulations in 1998 called the North American Cargo Securement Standard that included stricter requirements for how flattened cars could be loaded onto trucks.

The original standards prohibited synthetic webbing as a means of securing auto hulks and also called for either four structural walls or sideboards with tie-down assemblies for each stack of cars. In its newsletter, the Canadian Association of Recycling Industries (CARI), Toronto, said the standards “appear impractical” and asked its members for help in recommending alternatives to the standards.

Members of both CARI and the Institute of Scrap Recycling Industries Inc. (ISRI), Washington, came forward to testify at a hearing in Ottawa where suggestions from the scrap and auto recycling industries were heard.

The language proposed by the trade groups during that hearing was less specific, saying “vehicles used to transport flattened vehicles must employ a containment system which prevents loose parts from falling from all four sides of the vehicle and which extends to the full height of the cargo.” The use of synthetic material for auto hulk containment remains unacceptable to the regulators.