November/December 2007
Boston Hosts ReMA's Active Fall Board Meeting
ReMA's board of directors held its final meeting of the year Oct. 17-20 in Boston, where it approved the association's 2008 budget and passed the following motions:
- Approve a slate of nominees for national secretary/treasurer, including Manny Bodner of Bodner Metal & Iron Corp. (Houston), Ben Harvey of E.L. Harvey & Sons (Westborough, Mass.), Doug Kramer of Kramer Metals (Los Angeles), and Mark Lewon of Utah Metal Works (Salt Lake City).
- Appoint Marvin Siegel of Carolinas Recycling Group (Spartanburg, S.C.) as a director on the ReMA Resources Corp. board to fill the vacancy created by the resignation of Sam Hummelstein of Hummelstein Iron & Metal (Jonesboro, Ark.).
- Change the name of the Chapter Development Council to the ReMA Council of Chapter Presidents. This renamed group will elect a chair and vice chair for one-year terms at its meeting next April during the ReMA national convention.
- Pass a new nonferrous specification as follows:
Zurik—Shredded Nonferrous Sensor-Sorted Scrap (predominantly stainless steel) Shall be made up of a combination of the nonferrous metals: stainless steel, insulated copper wire, aluminum, copper, lead, magnesium, nickel, tin, and zinc, in elemental or alloyed (solid) form. The percentage of each metal within the nonferrous concentrate shall be subject to agreement between buyer and seller. Material generated by computer sensing equipment (e.g., induction sensor sorting, X-ray) technique(s). Shall have passed one or more magnets to reduce or eliminate free iron and/or large iron attachments. Shall be free of radioactive material, dross, or ash. Material to be bought/sold under this guideline shall be identified as "Zurik" with a number to follow indicating the estimated percentage nonferrous content of the material (e.g., "Zurik 90" means the material contains approximately 90% nonferrous metal content). May also be screened to permit description by specific size ranges. - Amend the Ebony and Eland specifications based on comments by Indian buyers. For Ebony (Composition or Red Brass), the change expands the specification to give trading parties more freedom regarding piece size and material weight. The two closing sentences of the specification now read: "No piece to measure more than 12" over any one part of weigh over 100 lbs. Heavier pieces acceptable upon mutual agreement between buyer and seller." For Ebony, the specification name was changed from "High Grade-Low Lead Bronze Solids" to "High Grade-Low Lead Bronze/Brass Solids" to make it clear that bronze is a type of brass.
- Modify the Zorba specification by changing its descriptive name from "Fragmentizer Nonferrous Mixed Metal Scrap (from automobile shredders)" to "Shredded Nonferrous Scrap (predominantly aluminum)" and shortening the text of the specification to the following: Shall be made up of a combination of the nonferrous metals: aluminum, copper, lead, magnesium, stainless steel, nickel, tin, and zinc, in elemental or alloyed (solid) form. The percentage of each metals within the nonferrous concentrate shall be subject to agreement between buyer and seller. Material generated by eddy current, air separation, flotation, screening, other segregation technique(s), or a combination thereof. Shall have passed one or more magnets to reduce or eliminate free iron and/or large iron attachments. Shall be free of radioactive material, dross, or ash. Material to be bought/sold under this guideline shall be identified as "Zorba" with a number to follow indicating the estimated percentage nonferrous metal content of the material (e.g., "Zorba 90" means the material contains approximately 90% nonferrous metal content). May also be screened to permit description by specific size ranges.
- Approve amendments to ReMA's suggested legislative language regarding materials theft.
- Pass changes to the association's railroad transportation policy statement. The ReMA board will convene again during the association's annual convention next April in Las Vegas.
Roundtable Examines Nickel, Stainless, and More
The Pittsburgh Chapter held its annual nickel/stainless roundtable and consumers' night banquet Sept. 6 in Coraopolis, Pa. In addition to a luncheon address by ReMA President Robin Wiener, the event offered presentations on the nickel, cobalt, and stainless markets as well as a keynote dinner speech by ReMA Chair Frank Cozzi, who reviewed some of the association's recent activities and priority issues. Here's a summary of the roundtable's market reports:
Nickel Returns to Earth. Nickel relearned the hard lesson that what goes up must come down, suffering a "significant pullback" in prices this summer, noted John Vorberger of Eramet North America (Coraopolis, Pa.). What caused this reversal of fortune? A shift in market fundamentals and the corresponding reaction of investment funds with nickel holdings, he said.
Regarding fundamentals, "we've seen a reaction from the demand side of the nickel market, mainly in the form of substitution," Vorberger said, with stainless consumers shifting from nickel-intensive 300 series grades to 200 series and ferritic grades—or away from stainless altogether.
On the substitution trend, Jill Talve of Franklin Stainless Corp. (Port Washington, N.Y.) noted that alternatives to the "bread-and-butter" 304 series "have taken hold of the end-user market like never before simply because this is the longest period in which raw materials have been consistently on the rise." Record nickel prices essentially priced 304 stainless out of the market, giving mills an opportunity to reintroduce 200 series grades—which are not new—to the market, she said. "Mills also added several variations to the grades to offer more potential in more applications and to widen their appeal."
Once users have changed to the 200 series, Talve said, "there really is very little reason to go back to 304 because the base price and the alloy surcharge for 200 series will always be lower." Anthony Poole of Platts (New York) added that one of his sources claimed that 304 stainless has "had its day," with many companies making a permanent move away from that series. Others claim that the 300 series will make a comeback, he said. The bottom line, Talve stated, is that 200 series grades have established a solid footing in the market. Scrap processors, meanwhile, will have to figure out how to handle the increasing flow of 200 series scrap coming into their operations.
On the supply side, nickel pig iron added new—and somewhat unexpected—metal into the nickel market. NPI supplies, mostly from China, rose from virtually zero in 2005 to 25,000 mt in 2006 and 80,000 mt in mid-2007, Vorberger noted. That tonnage has shifted the nickel market from deficit in 2006 to a projected surplus this year around 35,000 mt. Without the NPI tonnage, nickel "almost certainly would have remained in deficit throughout this year," he said. Thus, NPI "really brought forward the balancing of supply and demand by as much as 18 to 24 months."
Looking ahead, nickel demand will continue growing, thanks to ongoing growth in global stainless production and strength in other nickel-consuming markets, Vorberger said. Also, the momentum for additional substitution is beginning to slow, which will begin to minimize the loss of demand for nickel units. In terms of supply, NPI will remain part of the equation, but the next significant nickel supplies from new mining projects won't be available until 2008 at the earliest. "These projects will be very necessary to keep up with anticipated demand," he said, noting that "any significant delay in those projects could change our view going forward."
Battery Market to Propel Cobalt. In the cobalt market, production is currently around 58,000 mt, with 38,000 mt going into refined metal production and 20,000 mt going to the chemical industry for conversion into intermediate products such as cobalt oxides, powders, and carbonates, said Brian Helsel of Phoenixx International (Pittsburgh). Of the 38,000 mt that goes into refined metal production, about half—18,000 mt—goes directly into superalloys, magnets, hard materials, and alloys. The chemical sector, meanwhile, centers on cobalt use in rechargeable batteries in cars, computers, cell phones, and other products. "The chemical sector is the driver of cobalt consumption," Helsel noted, "though it's the cobalt metal that sets and drives the price for the entire complex."
The battery market will be the key for growth in the cobalt market, Helsel stated. Currently about 13,000 mt of cobalt goes into the battery market, and that total is on track to grow to 18,000 mt by 2010. In his view, overall cobalt consumption could exceed 60,000 mt this year. With assumed growth in demand of 4 to 5 percent a year, cobalt consumption could pass 100,000 mt by 2020, he said, conceding that it's "very difficult to predict that far out in this market."
One factor underpinning the market is the dwindling cobalt stockpile held by the U.S. Defense Logistics Agency, Helsel said. That group held 92 million pounds of cobalt in reserve in 1992, but its stockpile is now down to 2 million pounds, which will limit at least some supply available to the market and, hence, underpin prices going forward, he said.
Another positive factor is that the Democratic Republic of the Congo is exporting less cobalt-containing heterogenite ore to China, Helsel said. In recent years, China was processing that ore into cobalt oxides, powders, and carbonates. Those intermediate products were displacing cobalt metal units that otherwise would have been consumed, he explained. Recently, the DRC government has "cracked down" on heterogenite exports because it wants to refine the material domestically to capture greater profits from it, Helsel said. With less of this ore being turned into intermediate products in China and elsewhere, consumers will have to buy cobalt metal units again, he stated.
As for prices, cobalt has been "deflationary during this metals supercycle," Helsel said. "Cobalt, which has been notorious for price manipulation and price spikes throughout its history, has barely kept up with the price rises of other metals. So I would argue that cobalt prices today really are cheap."
ISRI Welcomes New Staff
Tom Herod is ReMA's transportation safety and training manager, a new position that will develop a transportation safety program to help companies reduce their trucking-related accidents and losses. Most recently, Herod was health, safety, security, and environment manager at BP Solar (Frederick, Md.), where he was responsible for the loss-control activities at a 550-employee manufacturing plant. He was also involved with developing the company's safety programs at its factories in Madrid, Sydney, and Bangalore, India.
Reach him at 202/662-8519 or tomherod@isri.org.
Danielle Waterfield is ReMA's new assistant counsel/director of government relations. In this position, she will handle a variety of government affairs issues and assist with the legal work of the association. Most recently, Waterfield served as chief operations officer and director of congressional relations for the Automotive Recyclers Association (Fairfax, Va.).
Reach her at 202/662-8516 or daniellewaterfield@isri.org.
Roundtables Boast Higher Attendance
ReMA's annual commodities roundtable forum, held Sept. 18-20 in Chicago, enjoyed its highest attendance in years, with more than 600 scrap processors, brokers, consumers, and analysts turning out for the event's sessions on ferrous, copper, aluminum, and e-scrap. The ferrous panel addressed transportation issues, scrap industry consolidation, and rail transportation. The copper and aluminum panels considered a variety of factors affecting the market today and in the future. And the electronics recycling panel reviewed the marketability of e-scrap's various commodities. Forum sponsors and exhibitors included Bucks Fabricating, BW Mountain Tarp, Globalscrap.com, Harris Press & Shear, Jupiter Transport Services, Platts/McGraw Hill, Quad Plus, Shared Logic Group, SDS Logistics, The Shredder Co., Thermo Scientific NITON Analyzers, Tung Tai Group, 21st Century Programming, and Wendt Corp. Next year's commodities roundable forum will be Sept. 15-17 in a new venue: the Hyatt Regency Downtown Chicago. •