July/August 1989
It was no surprise to the nearly 1,200 delegates attending the Bureau International de la Recuperation's (BIR) May convention in London that environmental issues would be in the spotlight. But sharing the glow was the issue of public relations. Touched on in several meetings of the membership was the importance of recyclers becoming more visible and active in local government and in their communities' source separation efforts.
A proposal by BIR to increase national associations' and individual members' subscriptions by 50 percent to pay for programming geared at addressing these concerns was turned down. National association delegates entitled to vote did not accept the proposal for a variety of reasons. As a result, a special meeting of the General Assembly has been scheduled for Munich in October to deal with the proposal.
While the environment is a major concern of BIR members, its related problems are generally not interfering with members' operating results--market reports were excellent.
In a powerful address to the Environment Committee, Committee Chairman Michael C.E. Lion, Philipp and Lion, Limited, London, told members that legislators and regulators must pay attention to the message of recyclers. "We are not here to be dictated to. We should be listened to, respected, and appreciated" for contributions that protect the environment and the economic health of nations. "Those that consider legislating and trying to control us should recognize that our experience and our contribution is of a very special nature," he said.
He acknowledged that recyclers are prepared to make the effort to cooperate with the authorities, but lamented that recyclers' communications with policy makers have primarily been reactive: "How absurd that so much of our time has been wasted and taken up with defending the issue that the materials we in BIR deal with are not waste but recycled materials with value."
This distinction was developed by Jean-Marie Junger, of France, head of the waste management services section of the Commission of European Communities Environment Directorate (DG XI). Junger discussed the commission's efforts to define waste. "Do we have to treat merchandise of a negative value and of a positive value in the same way?" he asked. "Of course we don't. This is fundamental to our definitions. … Waste which can be reclaimed must be viewed in a broader sense and ... handled under the rules governing merchandise."
Pierre Lieben, an administrator from the Environment Directorate of the Organization of Economic Cooperation and Development (OECD) in Paris, said the organization's work on controlling transfrontier movement of hazardous waste began in earnest in 1983, when a number of contaminated drums were lost between Italy and France. He discussed the United Nations convention that formalized regulations on such transport, and that adopted the OECD definitions of hazardous waste and disposal.
Herschel Cutler, executive director of the Institute of Scrap Recycling Industries (ISRI), noted that ReMA has had mixed success in advocating changes that promote safe recycling in the U.S. He said the group is engaged in a critical legislative process within the U.S. Congress in the reauthorization of the basic solid and hazardous waste statutes, emphasizing that the "Design for Recycling" concept is, "in the end, the only solution to this industry's and society's environmental problems.
"But even in the best of circumstances," Cutler continued, "certain things are evident: The good old days' of this industry are gone and will never return. ... Recycling has been changed permanently--the industry will now commit as much if not more time to managing environmental risks as it does on purchasing and sales. The ind ' ustry must become public and known. ... The industry will be required to make itself understood since failing that will jeopardize its very existence as private industry. Public relations and environmental sensitivity will be key characteristics for your management. Government will have an ever-increasing say in what you can do and how you will be allowed to do it. ... In adversity there is opportunity. While change is painful, change is inevitable."
Municipal Waste Recycling Must Be Cost-Effective
The economic viability of a municipal recycling program is an important factor in its success, said Keith Bury, managing director of Waste Management, Ltd., Cheshire, England, and chairman of the National Association of Waste Disposal Contractors, to the Municipal Waste Committee, chaired by Gianpiero Magnaghi, of Italy. "The history of recycling products from the domestic waste stream in the U.K. has not an established financial record when compared to other alternatives," he said.
For any recycling or resource recovery system to be successful, he said, there must be action by industry, commerce, and the public to reduce waste arisings; action by industry and government to promote recycling of production byproducts; action by industry to assist those wishing to recycle postconsumer waste; action by governments to promote the benefits of recycling; and the establishment and maintenance of viable market conditions for the use of recyclables-including tax and capital allowance incentives, if necessary.
"The key to future recycling efforts lies in finding new markets for reusable materials and in developing technologies that will minimize process costs," Bury concluded.
Challenges Ahead for Healthy Nonferrous Market
"Optimism and continuing good business" in the face of volatile markets and "unreasonable" export controls was the thrust of the summary of national reports by Nonferrous Metals Division President Michael C.E. Lion. He said that while "the volatility of the markets has certainly created its challenges and difficulties" for division members, they have met the challenges through their skill and their ability to anticipate and deal with market fluctuations. For instance, he noted, members are working on more of a "just-in-time" delivery basis--holding smaller inventories and keeping material moving so "they have not been caught when the market has suddenly fallen sharply."
Lion discussed the impact of currency fluctuations and the recent strength of the dollar, which he feels "will undoubtedly have an underlying effect on the reduction in dollar commodity prices, including those of the nonferrous metals," but he emphasized that he does not believe a recession is imminent. "We can anticipate more difficult and more varied trading conditions and perhaps not quite as healthy a business climate as we have enjoyed over the last couple of years," he said, "but ... I think some challenges and opportunities for our members will exist from which they can benefit."
Assuring members that BIR and its Nonferrous Division consider environmental and legislative concerns "a priority," Lion said "a great deal of attention and effort are being expended to provide for the concerns and the needs of our members" in those areas.
Worldwide, Lion said, reports are of continuing healthy nonferrous scrap business. He pointed to copper and aluminum as the best opportunities for positive business, with lead and zinc somewhat less active. He said the Nonferrous Division shares the concern of the U.S. Copper and Brass Fabricators over the European Community's "unjustified" copper scrap export controls, which he said must be removed. Noting that a healthy and competitive market is essential to the effectiveness and prosperity of the recycling industry, Lion said "it is therefore all the more important that, in a marketplace which becomes narrower in certain regional areas, the freedom to move material worldwide is permitted to our members."
The situation of aluminum scrap in Japan was profiled by Takaaki Yamamoto, senior managing director of Daiki Aluminum Industry Co., Ltd., Nishi-Ku Osaka. Yamamoto discussed the chronic lack of scrap aluminum in Japan: In 1988, he stated, approximately 399,000 tons of scrap metal were imported from more than 60 countries. While secondary alloy ingot in Japan has grown with the production of automobiles, he explained, scrap has been imported to make up for the shortfall in raw materials.
Yamamoto also explained the pricing situation in his country. Determination of alloy ingot prices is done before or just after delivery, resulting in major market risks. Scrap transactions are in dollars and sales in Japan are in yen, creating a great exchange rate risk. He alluded to a probable shortage of scrap metal in the future, which, in Japan at least, would cause a reliance on substitutes. For the time being, he said, the question is whether to rely on high- or low-grade scrap. Use of high-grade will eventually affect demand for primary ingot, but use of low-grade will cause an increase in processing and pollution-control costs.
Oriol Guixa, managing director of La Farga LaCambra S.A., Vinyoles, Spain, speaking before the
Nonferrous Technical Committee, explained continuous casting of copper wire from scrap copper at his plant. The facility produces 15,500 metric tons per year.
Nickel/Stainless Mixed Bag
Based on market shares, use, exports, and price, stainless steel scrap was presented with the American Metal Market Award as the top metal in 1988, said Barry Hunter, Stainless Steel and Special Alloys Division president, Samuel G. Keywell Co., Port Elizabeth, New Jersey, in his U.S. report. First-quarter-1989 activities "continue to reflect a brisk business with no apparent decline in demand," Hunter went on. He said domestic mills are consuming and receiving scrap at record-breaking levels--both in tonnage and in price-and customers are well stocked with inventories. Although scrap containing nickel has been "greatly devalued in relation to the decline of the LME," he said, products that do not contain nickel, such as high-speed steel and titanium scrap, are enjoying relatively good market conditions.
Austin Merrills, Ireland Alloys Holdings Ltd., Hamilton, Scotland, chairman of the Public Relations Committee, described the "scramble for supplies of stainless steel scrap and nickel alloys" in the United Kingdom in December 1988 that produced "dramatic rises in price--20 percent in December, 15 percent in January, and 10 percent in February." The U.K. is now in a period of downward adjustment, he said, following that period of record demand, prices, and consumption. He said stainless mills' order books remain good and foundries are still busy. He believes the nickel market will remain roughly in balance, in spite of low stocks and lack of new short-term capacity.
Regarding the stainless and nickel market in Belgium, Robert Vis, lnometal Sogerec NV, Burcht Zwijndrecht, explained that in the beginning of 1989 prices were the highest ever and demand was strong, but by May the situation had nearly reversed. The next few months look very difficult, he said.
Rafael San Martin Herrero, Inoxalla S.A., Barcelona, Spain, noted a lack of balance between supply and demand of stainless steel there, adding that upcoming months appear risky. For the Netherlands, Alfred Nijkerk, Magazine Recycling Benelux, Den Haag, noted difficulties created by environmental problems.
Guest speaker Jim Lennon, associate director of metals and mining research at Shearson Lehman Hutton Securities, London, discussed the prospects for nickel. He called 1988 "a remarkable year" for the metal and said the boom in prices has continued into 1989, primarily because of the growth in industrial production. A slowdown in industrial growth is expected for the rest of the year, he predicted, which will cause stainless steel demand to weaken.
Lennon noted that nickel supply has risen steadily in recent years but has failed to keep pace with rapidly rising demand. He said his firm estimates the industry will operate at 90 percent of capacity in 1989, but said "supply remains highly vulnerable to further disruption given the high-capacity utilization levels being achieved and because of the heavy reliance on highly volatile supplies from the Socialist Bloc countries" (which amounted to 12.5 percent of total supply in 1988).
Summarizing the stainless steel scrap market, Lennon said, "The downturn in stainless steel production we expect in late 1989 and in 1990 may mean that the near-term prospects for your' industry are not as good as they have been recently. However, given the projected shortage of primary production capacity, the prospect is that the secondary nickel producers will become of even greater importance in the 1990s."
Questioned about the influence on the market of the U.S.S.R. selling nickel to the U.S., Lennon said it probably will make little difference. "Nobody really knows whether the Soviets can sustain exports at current levels," he said. " … We'll have to wait and see."
Prior to the convention, the division hosted a tour of the British Steel Stainless facility in Sheffield. Participants viewed the firm's stainless melting and continuous casting works, plate mill, and cold rolling/finishing mill.
Ferrous: Market Holds as Disposal Problems Rise
Asbestos, polychlorinated biphenyls (PCBs), lead, and chlorofluorocarbons are some of the environmental hurdles the ferrous scrap industry has had to overcome in recent years, said Anthony P Bird, Ferrous Division president, of Bird Group of Companies, Stratford-upon-Avon, United Kingdom, in his world market report. "We are not told where manufacturers have hidden small but deadly toxic time bombs," he continued. "These problems should not be dealt with by the scrap industry at the end of a product's useful life, but at the beginning of the production cycle by government departments responsible for manufacturing."
Bird said the world ferrous scrap industry has enjoyed sound demand from international steelmakers. He noted technological progress such as developments in metal separation and heavy-duty processing equipment.
Seymour K. Padnos, Louis Padnos Iron & Metal Co., Holland, Michigan, reported on the U.S. ferrous scrap industry. He believes the buoyant world steel economy of last year is still with us. He explained that while scrap prices have eroded at inland U.S. markets, coastal markets have reached new high levels and are extending their reach inland. "The world economy outside the U.S.A. could very well be the driving force that will maintain [this] momentum," he speculated. Padnos noted that consumers on the East Coast have had to follow the export market in establishing their buying prices, while the West Coast has an advantage in its supply to the Far East and its continued minimill expansion. Environmental concerns have caused some processors to curtail operations, Padnos said, adding that ReMA is campaigning for manufacturers to design for recycling.
Currently, the most important ferrous scrap export markets for the Soviet Union are Western Europe and Japan, said Vitali Belchenko, of the U.S.S.R., but his country is now looking forward to increasing activity in Korea and the Pacific region. He predicted that the rapidly expanding steel production in South
Korea will lead to considerable shifts in the movement of scrap through the area. Approximately 2-4 percent of the total quantity of scrap annually produced in the U.S.S.R. is exported.
Osamu Yokota, too, noted an increase in crude steel production in Korea. His report on the Pacific Rim region noted that, since completion of the second stage of expansion of POSCO in Korea, that country could now be the sixth largest steel producer in the world. Minimills are also expanding their capacity in that country, he said. Yokota discussed a slight increase in Japanese steel scrap consumption in 1988, combined with a sharp drop in scrap imports.
In his report to the Shredder Committee, Bird said demand for U.K. product is good: "We can sell as much as we can produce." He expressed his concern over mounting environmental pressure in his country, since scrap is classified as waste and processors may be forced to license their facilities as waste disposal sites. He said processors have fought this vehemently and have gained some concessions, but they are still "far from happy." He mentioned the study under way between processors and government bodies to identify all sources of possible PCB contamination.
Disposal of shredder residue is a problem common to West Germany, Italy, Spain, Austria, and other countries, according to reports. In West Germany, disposal costs are rising and landfill space is increasingly difficult to find. Austria is considering alternative disposal methods such as high-temperature incineration.
Organized Approach Needed to Ease Paper Glut
In his summary of national markets, Jean-Pierre Lehoux, president of the BIR Paper Stock Division, of Soulier, La Plaine St. Denis, France, said he anticipates record demand for waste paper in 1989 due to a strong and steady new paper market. Expectations for price increases, however, may not be so optimistic, he added, since collection increased more sharply than consumption during the fourth quarter of last year.
Because of these low prices, Lehoux went on, producers will have to share more of the cost of collection and processing than in previous months in order to maintain high collection levels.
Lehoux said BIR has been advocating the ecological advantages of greater consumption of recycled paper products such as computer paper, copying paper, printing paper, and household paper.
Nini Krever, Traders International Corp., North Palm Beach, Florida, said U.S. paper stock reports are mostly positive, with the exception of the news grades. Municipal mandatory collection programs in some states have hurt the Market for old news. Pulp demand, on the other hand, has been good, she said.
The paper stock market in the United Kingdom was reported stable, a condition expected to continue through this quarter. Exports rose in 1988 and are up again this year. While mill capacity is up, mills continue to look to the rest of Europe for sales.
According to reports, plants handling all paper grades have been running at near-full capacity this year in Switzerland; while consumption is up in Sweden, the market is getting tougher; and exports and imports of paper stock are both up in Finland. In Denmark, the market is stagnating somewhat; production and consumption of packaging and writing paper are expected to rise in the next few years, but there is not too much optimism about the overall future of the industry. Sufficiently good orders for the low grades, normal inventories, and stabilizing prices were reported for the Federal Republic of Germany-imports from the U.S., Italy, and Spain are pushing stocks up, but the possibility exists for exporting to the Far East.
Italy's Gianpiero Magnaghi, ComImpex, SPA, Rozzano Milano, said consumption is up and imports have reached a record number there. The French waste paper market is in excellent condition, according to the national report, with full order books at the mills due to continually increasing utilization rates.
An organized approach to increasing awareness and use of recycled paper was called for by guest speaker Roland W.J. McKinney. McKinney is raw materials unit head of the paper and board division of Pira, a U.K. trade association for the paper and packaging industries. Failing waste paper prices and disappearance of normal collection channels, due to an increase in mandatory collection programs, are an abuse of the recycling concept, he told members. In the U.K., waste paper recovery is being investigated by the Department of Trade and Industry along with the paper mills to ensure a targeted approach to the problem.
While consumer awareness of the benefits of paper recycling has been elevated without a formalized approach, the overall move to increase recycling has not been strong or fast enough, McKinney explained. He believes this is due to a perception that recycled paper is of lower quality, the lack of a coordinated information program, and the conservatism of industry.
Any strategy to increase secondary fiber use, he continued, should ensure relevant markets are developed, adequate waste paper supplies are available, and resources devoted to such a program are used to maximum effect. He referred to a national center developed in Japan that has been successful in increasing use of recycled paper through public promotion, research, aid to waste paper merchants to modernize, and building waste paper stocking centers.
Harmonized Policy Would Aid Plastics Management
The Plastics Round Table Committee, chaired by Hans-Joachim Brauer, A.H. Julius Rohde GMBH, Hamburg, Federal Republic of Germany, reported that the current market situation for plastics is partly related to a drop in prices, which, in some cases, no longer cover costs. As demand for large quantities is still high, price drops are expected to stay within limits. Export markets are still good. The committee recommended that members convince producers that plastic reclamation is always preferable.
Hroar R. Skov, director of Brussels-based Eutraplast, the European trade association for plastics processors, suggested the development of a computer data base for buyers and sellers of recyclable plastic. If there is enough interest in such a system, he said, it could be on-line by fall.
Peter G. Claus, director of the Association of Plastics Manufacturers in Europe, noted that the chemical industry recognizes today that they are part of the total waste management picture and are prepared to do their part to promote solutions to waste management problems. He said the European Community is preparing a directive on plastics management and a policy on municipal waste management, and has asked the industry to assist. "We need a coherent, harmonized policy in Europe so that we can know where we're going and what we're working toward," he said. Important considerations of such a policy should be (1) the minimization of waste generation, for example, use of lighter-weight packaging; (2) waste recycling, in which government and industry must cooperate; (3) thermal technology, or waste-to-energy technology; and (4) reduction in reliance on landfill disposal.
U.S. Only Bright Textile Report
"If small and medium-sized companies wish to survive, they must restructure and adapt, otherwise they will disappear," remarked Henri Ubogi, Ubogi Aubervilliers, Aubervilliers S.A., France, president of the Textiles Division, in his world market report. "Today, in order to make a sale," he said, "we have to travel the world incurring operating and marketing costs which are considerably higher than before."
Ubogi noted that there appears to be greater demand for woolens and said demand is holding up for secondhand clothing. But he expressed concern over the wiping cloth industry; top-quality goods sell, but ordinary grades have no market openings. The decline in consumption is due in part to higher quality demands by consumers, he said.
John H. Baer, A. Sheftel and Sons, Inc., Allentown, Pennsylvania, reported that while markets for new cuttings in the U.S. are active, the high cost of sorting and the inadequate labor supply are problems.
He noted that new all-cotton cuttings are of interest to paper manufacturers and that all-cotton wiping rags are moving. Baer also said that firms in the U.S. have been quite successful in establishing new markets and that progress is being made in educating suppliers to keep colors separated.
Baer, who presented the only positive market report at the meeting, said, "I am, as usual, very confident."
Industry Must Push Recycling Research
At a BIR press luncheon, the recycling industry was called on to encourage greater research in order likely to impose obstacles in the way of the further development of the reclamation industries. This seems largely to be due to the confusion between reclaimable secondary raw materials and waste. What can be reclaimed and recycled must surely be regarded as a potential raw material. It should not be subject to the same restraints in handling as waste materials.
Lord Ezra concluded by saying, "We must do more to publicize what is going on in the reclamation and recycling sector. There is an excellent story to tell."
In his report to the membership, Farber said, "Our industry has been called upon to play an even greater role within our society. Rarely a day goes by that our industry is not mentioned or that you do not read or hear about problems involving environmental protection. More often than not, recycling is viewed as one of the solutions.
"Instead of leaving it up to others to tackle these problems, let's assume our responsibilities, step forward, and speak up. This attitude is all the more necessary as we are encountering more and more obstacles which hinder us from carrying out our work while we are precisely those who can provide the best solution."
For their efforts in formulating policies to fight adverse environmental legislation and to get the BIR message out to governmental bodies and the general public, Farber recognized Austin Merrills, chairman of the BIR Public Relations Committee, and Michael C.E. Lion, chairman of the Environment Committee.
The assembly reelected Farber to a second two-year term as BIR president. Reelected vice presidents were Barry Hunter, Sidney Silver, American Iron and Metal Co. 1969, Inc., Verona, New Jersey, and Albert Strikkers, Curef Metal Processing BV, Rotterdam, The Netherlands.
Newly elected vice presidents were Jose-Maria Puges, Papeles Allende S.A., Barcelona, Spain; Charles Hemmerle, Rolanfer S.A., Wioppy, France; Hans-Erik Hempel-Hansen, H.J. Hansen Genvindingsindustri, Odense, Denmark; and Hanns-Jorgen Hergt, Eisen und Metall AG, Gelsenkirchen, Federal Republic of Germany. •
--Susan Crissinger, James E. Fowler, and Gerry Romano
It was no surprise to the nearly 1,200 delegates attending the Bureau International de la Recuperation's (BIR) May convention in London that environmental issues would be in the spotlight. But sharing the glow was the issue of public relations. Touched on in several meetings of the membership was the importance of recyclers becoming more visible and active in local government and in their communities' source separation efforts.