Going full circle

Scrap trading specifications authored by the Washington-based Institute of Scrap Recycling Industries (ISRI) have long carried the phrase “subject to agreement between buyer and seller.” The phrase can be regarded as applicable and appropriate in a market where each individual scrap buyer has unique requirements and the ability to accept impurities.

For the past few years, that phrasing has remained in place, but governments around the world increasingly have demonstrated an unwillingness to accept this flexibility as they have rushed to impose their own quality standards on the recycling industry.

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The government of China is acknowledged as having started this trend, but it has spread to neighboring nations with regularity. In the second half of the previous decade, processors preparing materials for export began making decisions and investments to confront the new reality.

To veteran recyclers and their equipment suppliers, the response to the shifting export market signifies one of many ongoing steps in the constant evolution of how scrap is collected, processed and sold.

Making the grade

Metals recyclers know what they collect and process ultimately will have to be “furnace ready,” though that term, as with an ISRI specification, likewise can be unique to each buyer. In the ferrous market, though, the rise of the electric arc furnace (EAF) in the North American steel sector has required more attention to ferrous scrap chemistry.

The stricter requirements of EAF melt shops (compared with those at integrated mills with basic oxygen furnaces, or BOFs) helped spur the proliferation of one of the biggest changes to scrap processing: the rise of the auto shredding plant.

Although the Proler brothers in Houston built one of the first auto shredders in the U.S. in the 1950s to serve an integrated mill, clean ferrous auto shred proved increasingly necessary if the steel and iron in scrapped cars were going to make their way back to EAF mills and to foundries.

The quick rise of the shredder in the 1970s was joined that same decade by a new, cleaner and more efficient way to handle wire and cable scrap: the wire chopping line. It largely replaced manual stripping and the use of fire and furnaces formerly used to burn off plastic wire coatings.

The spread of these two techniques has prompted the ongoing introduction of new automated methods for separating metals from nonmetallics and from one another.

Equipment vendors and scrap processors Recycling Today contacted indicate that, two decades into the new millennium, investing in technology to achieve product purity and sufficient automation while also maintaining a profit margin presents a series of critical calculations.

“There is always a fine balance of automation equipment and employee supervision that allows you to cost-effectively create a higher purity chop,” says Zach Mallin, vice president at Kansas City, Missouri-based wire chopping company Mallin Cos.

Shredder operators also are being forced to pay more attention to the chemistry of their ferrous output, sources say.

An increasingly complicated feedstock stream, rising labor costs and an export market that is shifting to insist on purity standards matching those in North America are prompting the evolution process to speed up as the new decade begins.

Automation investments

By the 1990s, scrap recyclers were investing in automation in part because the practice of training and maintaining a workforce of manual sorters in North America was increasingly difficult. For many processors, the market boom in China came at the right time for them to defer such investments.

In the late 1990s and the first 15 years of the new century, buyers in China were more than willing to purchase lightly sorted (some might say poorly sorted) material and manually sort it with the abundant labor available in that urbanizing nation of about 1.4 billion people.

A combination of political and demographic reasons prompted a sudden change in China’s willingness to buy lower grade material in the second half of the 2010s, with baled wire and cable and mixed shredded metals with contaminants (such as circuit boards and air bags) among the newly unwelcomed arrivals.

The shift has prompted processing and sorting investments to rise, vendors and processors alike say.

“We find many processors are investing in equipment to upgrade the existing material or to increase metals recovery from existing feedstock,” says Mike Shattuck, market manager of metals recycling at Erie, Pennsylvania-based Eriez.

In the auto shredding sector, “Investment in new shredders has been relatively flat,” says Ethan Willard, shredder business development manager at Buffalo, New York-based Wendt Corp. The action in shredder yards is taking place downstream, he says.

Automated wire processing investments, on the other hand, are growing in North America. “More dealers are installing chopping equipment in order to better market the resultant copper chops since insulated wire has been more difficult to move overseas,” says Brian Shine of Lancaster, New York-based wire chopping firm Manitoba Corp.

John Sacco of Bakersfield, California- based Sierra Recycling & Demolition, says it is not the first time that changes to wider circumstances have spurred vigorous equipment investments. He says the rise of capital-intensive “super yards” provided an opportunity for Sierra to sell shear/baler/loggers to companies that wanted to market scrap directly to consumers.

“The shear/baler/logger gave the small and medium-sized scrap processors the ability to compete against big yards with their ability to process in three different forms,” Sacco says. “By doing so, they were able to control their destiny by processing their scrap and going mill-direct instead of having to ship to the large processor who was the only one that could afford the separate big shears and the separate big balers.”

Crowded field

In the current evolutionary process, how processors choose to make their new technology investments is one important subplot. Another—more likely to be remarked upon by processors rather than vendors—is the rising cost of such expenditures.

At least one vendor sees demand for wire processing equipment increasing further yet, with sales into shredder yards a potential growth sector as a way to upgrade the postshredder insulated copper wire (ICW) stream.

“This need has brought wire chopping into the shredder yard,” says David Siejka, who focuses on the France-made MTB wire processing product line for Wendt. “Historically, ICW was a China export, but as that market closed, yards creating ICW have had to make a decision: either export wire as is, sell wire to a domestic processor or capture the added value by chopping the wire themselves,” he adds.

Despite all the installed capacity, processors and vendors have no trouble identifying areas where further research and automation could help improve the margins of companies that chop wire and cable.

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“The most challenging aspect of wire chopping is the labor-intensive task of presorting the wire to ensure quality chops are being produced,” Shine says. “If that could be technologically improved, that would be a significant advancement.”

In auto shredder yards, the close attention to nonferrous quality output may need to be matched by renewed attention to ferrous shred quality. “Ferrous downstream designs are evolving to address copper-bearing reduction in an automated fashion,” Wendt’s Close says.

One direction

Recyclers and vendors alike see specialization remaining a critical niche to be filled by processors.

Robert Broughton, scrap market manager of Walton, Kentucky-based Steinert, says he sees it unfolding this way: “We consider the future to be consisting of two different plants, the first being an overall recovery plant, and the second being a refinement plant.”

Broughton says the technology exists for shredders and wire choppers alike to produce furnace-ready materials if and when the necessary levels of investment are made. “The industry now has almost all the tools required to separate the reusable and recyclable commodities, but the economics might not always make sense,” he says.

Mallin says he foresees a shift in the accompanying labor market as well. “There is so much automation and different pieces of equipment that are being installed. They all need to be taken care of, and it is harder and harder to find good mechanics out in the workforce currently.”

Whatever one’s viewpoint on change, it seems certain the accelerating evolutionary stages of scrap processing will continue to present a need for critical management decisions.

The author is senior editor of the Recycling Today Media Group and can be contacted at btaylor@gie.net.