Scrap Industry News

Scrap recyclers have been making a living for centuries, notes Len Shaw, executive director of the Canadian Association of Recycling Industries (CARI), but product designers can make the process more difficult when unwelcome materials are used.

Shaw spoke at a session sponsored by CARI at the Canadian Solid Waste and Recycling Expo late last year in Toronto. He cited the presence of airbags, mercury switches and non-recyclable plastics as hindrances toward full end-of-life vehicle recycling.

Mercury switches, by volume, are a minor contaminant in the scrap metal stream, but any traces of mercury emitted by the mills and smelters that consume scrap metal are unwelcome. Shaw noted that automakers are finally committing to stop using mercury switches, which can often be found in the trunks and glove compartments of vehicles.

Airbags—though lauded as a safety feature—contain a carcinogenic chemical that can make its way into scrap and shredder residue streams. Additionally, airbags can pass through auto shredder units without exploding, becoming "little bombs" when they arrive at aluminum smelters, according to Shaw.

Because North American governments like airbags as a safety feature, "now automakers are looking at designing cars with up to 14 airbags," Shaw remarked.

While metals recycling may be centuries old, plastic recycling is less established. "It’s tough to make commingled plastics [found in autos] into something—especially if they are contaminated with paints and solvent," noted Shaw.

Consolidation is proposed as the solution to the steel industry’s problems. But Phillip Casey, CEO of Gerdau AmeriSteel Corp., Tampa, Fla., says there is nothing easy about the process of consolidation.

"I can assure you, there is all kinds of hell going on," he told attendees of the Steel Scrap 101 Seminar, held in St. Louis in mid-February. "We’re in essence trying to consolidate four separate company cultures into one during a time when conditions are tough." The side effects of consolidation are tough on everyone involved, Casey indicated, including employees, managers, customers and suppliers. While there has been some merger activity already, more appears poised to occur.

Major changes seem certain on the integrated steelmaking side, where the International Steel Group (ISG), Cleveland; AK Steel, Middletown, Ohio; and U.S. Steel Corp., Pittsburgh, are bidding against each other to acquire most of the integrated capacity in the U.S. "Imagine the kind of trauma they are going to interject into this drama," Casey remarked.

Casey said that the role of an executive in these times is also challenging. "You have to be visible to people [and] encourage them to take care of the customers and not worry about their job security."

Customers may have to adjust to working with much leaner office staffs at steel companies, Casey indicated, pointing out the lean management model of ISG in particular. "Imagine how many communication chains are going to be broken," he remarked. "Customers are being ripped out of their comfort zones."

Ultimately, Casey said he believes there will be from three to five integrated steelmakers left in the U.S. and three to five major "bar producers" on the mini-mill side. "During the next 24 months, [corporate] names that have been around for 100 years will disappear. Small regional mills are going to have a hard time competing," he declared, "not because they don’t have talented managers [but] because of a lack of access to capital."

The Steel Scrap 101 Seminar was hosted in St. Louis in February by the Institute of Scrap Recycling Industries Inc. and the Steel Manufacturers Association.

Advanced Recycling, Concord, N.H., has announced the construction of a greenfield site in Claremont, N.H., that will serve as the company’s fourth scrap recycling location.

Advanced, part of Max Cohen & Sons Inc., is constructing a three-acre building in Claremont that will reach up to 65 feet high and that will be equipped with overhead cranes, according to the company’s Steve Cohen.

The facility, anticipated to be operational this summer, will have direct rail access and more than five acres of paved storage area.

Cohen is billing the site as "the largest indoor recycling facility in New England," and says that its location on New Hampshire’s western border will allow the company to better serve customers in Vermont and western Massachusetts.

In addition to the new Claremont site, Advanced Recycling also operates facilities in Concord, Rochester and Manchester, N.H. According to information on its Web site, the company handles ferrous and nonferrous metals, cardboard and oil filters and offers a container service for construction and demolition (C&D) debris.

SCRAP AND STEEL'S COMMON GROUND

If the organizers of scrap and steel industry dialog events were to appoint a spokesperson, it just might be Monty Parker Sr., vice president of procurement and rail transportation with the CMC Steel Group, Seguin, Texas.

Parker, who was one of several speakers of the "Steel Scrap 101" event hosted in St. Louis in February by the Institute of Scrap Recycling Industries Inc. (ISRI) and the Steel Manufacturers Association (SMA), spoke on the topic of scrap performance metrics, but first addressed the similarities of the scrap and steel industries.

"We have a common purpose," Parker told the scrap dealing and steelmaking attendees. "Our two industries need each other—we are inextricably linked."

Parker remarked that it was in the mutual interests of both sides to address problems with a unified approach, naming keeping radioactive items out of the scrap as just one example.

"Helping each other out should be way up on our priority lists every day," Parker stated. "For both of us, creating a margin between our costs and our sales has been difficult for the past couple of years."

Mill rejections of scrap loads were identified by Parker as potential sources of animosity, but Parker said, "Steelmakers hate to reject [a load] just as much as you hate to hear it."

The scrap buyer urged attendees to get to know each others’ businesses better by taking tours and talking regularly with their suppliers or customers. "There should be no surprises," he stated. "Communicate directly with the mill as often as necessary," Parker urged scrap dealers in attendance.

Parker clarified that dealers and mill buyers "have the right to question each other," but urged attendees to adhere to rules of courtesy and good behavior, including being humble, respecting the dignity of the individual and adhering to the golden rule: Do unto others as you would have them to unto you.