Lead Recycling - Opportunity Knocks on Primaries’ Doors

Lead Recycling  

Opportunity Knocks on Primaries’ Doors

The renewed call for additional lead recycling capacity is being answered not only by existing secondary smelters but also by primary lead producers in the United States and abroad.

This is not the first time the secondary lead industry has found itself in this situation. A similar circumstance occurred in the late 1970s, when U.S. secondaries increased their lead-recycling capacity from approximately 700,000 tons per year to more than 1.2 million tons per year. This time, however, more than just existing, secondary lead companies are in the run to add new lead capacity.

The nation’s largest primary lead producer, the Doe Run Company, based in St. Louis, has announced its intentions to enter the recycling business by converting an idle primary lead smelter/refinery in Boss, Missouri, into a 60,000-ton-per-year lead recycling plant. In addition, other primaries in the United States and Canada reportedly have been evaluating the recycling business with an eye toward possible entry. A number of companies involved in primary lead operations elsewhere in the world also are said to be looking at the recycling business in the United States.

Lead recycling is nothing new to primary lead producers in other countries. This is especially evident in Western Europe, where a number of lead companies have, for years, complemented their primary smelting operations with lead recycling operations.

Forces Behind the Move

There are several reasons why primary lead companies are eager to enter the recycling sector. The most obvious is that the business often can be quite profitable. This has been especially true during the past three to four years, as U.S. lead prices have been maintained around 40 cents and more per pound, while prices for scrap batteries, for the most part, have remained at less than 8 cents per pound. (Premiums reportedly have been paid on the West Coast.) This is quite a contrast to the scrap/lead price relationship that existed the last time lead was priced above 35 cents per pound--in the early 1980s. At that time, secondary smelters were paying as much as 19 cents per pound for spent batteries.

Primary lead companies also have found incentives to enter the secondary market from criticism from environmental groups that want state and federal governments to reduce or eliminate lead mining and impose weighty taxes on primary lead and products that contain primary lead.

It is the recycling fervor, however, that has the primaries most concerned about their long-term future in the U.S. lead market. Through the 1980s, as lead recycling increased, the primaries, to balance the market, were forced to reduce annual production from approximately 560,000 tons at the beginning of the decade to a little more than 400,000 tons in 1989. During that same time period, secondary output rose from approximately 590,000 tons to about 770,000 tons. The primaries' share of U.S. lead output dropped from 48 percent in 1980 to 34 percent last year.

A further erosion of the primaries' market share is almost certain as an increasing percentage of lead is consumed in recyclable products, especially batteries. Lead consumption in the battery industry increased from 657,000 tons in 1980 to more than 1 million tons in 1989. Today, more than 80 percent of all lead consumed in this country is used in batteries--all of which are recyclable--compared with 60 percent 10 years ago. And, increasingly, there is the prospect that state and/or federal legislative bodies will restrict the use of lead in products that are not recyclable.

Regulating a Primary Advantage?

At the same time that government regulatory and legislative bodies are demanding increased lead recycling, they also are becoming more insistent that it be done as cleanly and safely as possible. Virtually all regulations affecting lead recycling are being, or are likely to be, tightened. It is because of this that primary and larger secondary lead producers may be able to get a leg up on many of the smaller recyclers.

The day may be coming, very soon, when traditional lead recycling technologies are made obsolete by compliance standards for clean air, ground, water, and waste disposal.

Some emerging technologies promise to raise environmental compliance capabilities to meet even the toughest anticipated requirements. However, these technologies will require relatively high capital outlays, which may be beyond the means of some existing lead recyclers.

Doe Run's plans for its proposed $30-million-plus recycling plant include installing a state-of-the-art battery breaking/separation/desulfurization system developed by an Italian research and engineering firm, Engitec Impianti.

This system, called the CX Process, is said to offer improvements in solving the ecological problems of waste disposal, water discharge, and sulfur dioxide emissions connected with current lead-acid battery recycling processes. Initial capital costs will be expensive, which may deter many existing recycling companies, but may open wide the door for larger corporations, such as primaries, to enter the recycling business.

Battery Makers Joining the Act

Those companies with the financial means and shrewdness to fund and employ the emerging best available technologies likely will be best positioned to serve the nation's recycling needs. This is especially critical to battery manufacturers, which are increasingly being made to assume responsibility for the safe recycling of their products.

A greater share than ever before of the scrap battery population is being controlled by the battery makers themselves because of collection and recycling legislation and the companies' own expanded return programs. In fact, it has been estimated that nearly 50 percent of all scrap batteries generated through the sale of replacement batteries last year were collected by battery manufacturers and sent directly to smelters for conversion to new lead. Within five years this percentage is likely to be closer to 75 percent.

To some extent, battery manufacturers are already protecting their own interests by also being recyclers. This is true of Exide, Reading, Pennsylvania; East Penn, Lyon Station, Pennsylvania; and GNB, St. Paul, Minnesota. Most of the industry, however, does not have recycling capability and must rely on others to process the scrap batteries they receive.

What does this mean to primary lead producers? Not only might they almost be forced into recycling to maintain their longstanding relationships with battery manufacturers--and their future in the lead industry--but they also are likely to be encouraged to do so by the battery industry.

The primaries can bring to the table the financial commitment to raise lead recycling to a more sophisticated and environmentally safe level. They, along with secondaries that are able and willing to make this commitment, could help ensure a bright future for lead recycling.

[SIDEBAR]

Setting the Stage in the 1980s

Following the boom years for lead in the late 1970s, when demand and prices reached record levels, U.S. secondary lead facilities expanded--from about 700,000 tons per year to more than 1.2 million tons per year--and set the stage for a collapse that resulted in several bankruptcies and numerous plant closures by the mid-1980s, bring annual lead recycling capacity down to less than 700,000 tons. It also created speculation inside and outside the industry that there were not enough lead recyclers in the United States to ensure that the environment would escape contamination from the accumulation and haphazard disposal of millions of spent lead-acid batteries.

Some environmental groups even suggested that, perhaps, batteries should be made from something other than lead.

Private and public studies were commissioned to examine U.S. scrap lead collection and recycling activities and identify potential threats to the environment and public health from spent batteries that might be incinerated or dumped in landfills.

One conclusion of these studies was that, due to low lead prices and the resultant reduction in recycling capacity, battery recycling rates in the United States were considered, to some, alarmingly low. Estimates on the total number of batteries left unrecycled varied, but the results from most of the studies, including one commissioned by the Environmental Protection Agency, indicated that as many as 90 million spent automotive batteries were not recycled between 1980 and 1986.

By the time the fundamentals in the lead market changed and prices rose to fairly profitable levels, the furor to recycle spent batteries had already resulted in numerous attempts to increase collection of the batteries. This has led to several states passing or at least considering legislation requiring all wholesalers and retailers of batteries to accept scrap batteries from their customers and, generally, has increase awareness of the need for adequate secondary lead capacity to ensure that virtually all batteries are recycled in a timely and safe manner.

[SIDEBAR]

U.S. Refined Lead Production, 1980-1989 (tons)

1980: Primary (604,000); Secondary (640,000); Total (1,244,000)

1981: Primary (549,000); Secondary (637,000); Total (1,186,000)

1982: Primary (570,000); Secondary (574,000); Total (1,144,000)

1983: Primary (572,000); Secondary (498,000); Total (1,070,000)

1984: Primary (429,000); Secondary (646,000); Total (1,075,000)

1985: Primary (544,000); Secondary (628,000); Total (1,172,000)

1986: Primary (408,000); Secondary (634,000); Total (1,042,000)

1987: Primary (411,000); Secondary (725,000); Total (1,136,000)

1988: Primary (432,000); Secondary (761,000); Total (1,193,000)

1989: Primary (436,000); Secondary (835,000); Total (1,271,000)

[SIDEBAR]

U.S. Refined Lead Consumption, 1980-1989 (tons)

1980: Battery Industry (711,000); Total (1,174,000)

1981: Battery Industry (849,000); Total (1,246,000)

1982: Battery Industry (776,000); Total (1,222,000)

1983: Battery Industry (889,000); Total (1,262,000)

1984: Battery Industry (954,000); Total (1,260,000)

1985: Battery Industry (927,000); Total (1,250,000)

1986: Battery Industry (941,000); Total (1,265,000)

1987: Battery Industry (1,051,000); Total (1,327,000)

1988: Battery Industry (1,069,000); Total (1,351,000)

Lead Recycling  

Opportunity Knocks on Primaries’ Doors

The renewed call for additional lead recycling capacity is being answered not only by existing secondary smelters but also by primary lead producers in the United States and abroad.

This is not the first time the secondary lead industry has found itself in this situation. A similar circumstance occurred in the late 1970s, when U.S. secondaries increased their lead-recycling capacity from approximately 700,000 tons per year to more than 1.2 million tons per year. This time, however, more than just existing, secondary lead companies are in the run to add new lead capacity.

The nation’s largest primary lead producer, the Doe Run Company, based in St. Louis, has announced its intentions to enter the recycling business by converting an idle primary lead smelter/refinery in Boss, Missouri, into a 60,000-ton-per-year lead recycling plant. In addition, other primaries in the United States and Canada reportedly have been evaluating the recycling business with an eye toward possible entry. A number of companies involved in primary lead operations elsewhere in the world also are said to be looking at the recycling business in the United States.

Lead recycling is nothing new to primary lead producers in other countries. This is especially evident in Western Europe, where a number of lead companies have, for years, complemented their primary smelting operations with lead recycling operations.

Forces Behind the Move

There are several reasons why primary lead companies are eager to enter the recycling sector. The most obvious is that the business often can be quite profitable. This has been especially true during the past three to four years, as U.S. lead prices have been maintained around 40 cents and more per pound, while prices for scrap batteries, for the most part, have remained at less than 8 cents per pound. (Premiums reportedly have been paid on the West Coast.) This is quite a contrast to the scrap/lead price relationship that existed the last time lead was priced above 35 cents per pound--in the early 1980s. At that time, secondary smelters were paying as much as 19 cents per pound for spent batteries.

Primary lead companies also have found incentives to enter the secondary market from criticism from environmental groups that want state and federal governments to reduce or eliminate lead mining and impose weighty taxes on primary lead and products that contain primary lead.

It is the recycling fervor, however, that has the primaries most concerned about their long-term future in the U.S. lead market. Through the 1980s, as lead recycling increased, the primaries, to balance the market, were forced to reduce annual production from approximately 560,000 tons at the beginning of the decade to a little more than 400,000 tons in 1989. During that same time period, secondary output rose from approximately 590,000 tons to about 770,000 tons. The primaries' share of U.S. lead output dropped from 48 percent in 1980 to 34 percent last year.

A further erosion of the primaries' market share is almost certain as an increasing percentage of lead is consumed in recyclable products, especially batteries. Lead consumption in the battery industry increased from 657,000 tons in 1980 to more than 1 million tons in 1989. Today, more than 80 percent of all lead consumed in this country is used in batteries--all of which are recyclable--compared with 60 percent 10 years ago. And, increasingly, there is the prospect that state and/or federal legislative bodies will restrict the use of lead in products that are not recyclable.

Regulating a Primary Advantage?

At the same time that government regulatory and legislative bodies are demanding increased lead recycling, they also are becoming more insistent that it be done as cleanly and safely as possible. Virtually all regulations affecting lead recycling are being, or are likely to be, tightened. It is because of this that primary and larger secondary lead producers may be able to get a leg up on many of the smaller recyclers.

The day may be coming, very soon, when traditional lead recycling technologies are made obsolete by compliance standards for clean air, ground, water, and waste disposal.

Some emerging technologies promise to raise environmental compliance capabilities to meet even the toughest anticipated requirements. However, these technologies will require relatively high capital outlays, which may be beyond the means of some existing lead recyclers.

Doe Run's plans for its proposed $30-million-plus recycling plant include installing a state-of-the-art battery breaking/separation/desulfurization system developed by an Italian research and engineering firm, Engitec Impianti.

This system, called the CX Process, is said to offer improvements in solving the ecological problems of waste disposal, water discharge, and sulfur dioxide emissions connected with current lead-acid battery recycling processes. Initial capital costs will be expensive, which may deter many existing recycling companies, but may open wide the door for larger corporations, such as primaries, to enter the recycling business.

Battery Makers Joining the Act

Those companies with the financial means and shrewdness to fund and employ the emerging best available technologies likely will be best positioned to serve the nation's recycling needs. This is especially critical to battery manufacturers, which are increasingly being made to assume responsibility for the safe recycling of their products.

A greater share than ever before of the scrap battery population is being controlled by the battery makers themselves because of collection and recycling legislation and the companies' own expanded return programs. In fact, it has been estimated that nearly 50 percent of all scrap batteries generated through the sale of replacement batteries last year were collected by battery manufacturers and sent directly to smelters for conversion to new lead. Within five years this percentage is likely to be closer to 75 percent.

To some extent, battery manufacturers are already protecting their own interests by also being recyclers. This is true of Exide, Reading, Pennsylvania; East Penn, Lyon Station, Pennsylvania; and GNB, St. Paul, Minnesota. Most of the industry, however, does not have recycling capability and must rely on others to process the scrap batteries they receive.

What does this mean to primary lead producers? Not only might they almost be forced into recycling to maintain their longstanding relationships with battery manufacturers--and their future in the lead industry--but they also are likely to be encouraged to do so by the battery industry.

The primaries can bring to the table the financial commitment to raise lead recycling to a more sophisticated and environmentally safe level. They, along with secondaries that are able and willing to make this commitment, could help ensure a bright future for lead recycling.

[SIDEBAR]

Setting the Stage in the 1980s

Following the boom years for lead in the late 1970s, when demand and prices reached record levels, U.S. secondary lead facilities expanded--from about 700,000 tons per year to more than 1.2 million tons per year--and set the stage for a collapse that resulted in several bankruptcies and numerous plant closures by the mid-1980s, bring annual lead recycling capacity down to less than 700,000 tons. It also created speculation inside and outside the industry that there were not enough lead recyclers in the United States to ensure that the environment would escape contamination from the accumulation and haphazard disposal of millions of spent lead-acid batteries.

Some environmental groups even suggested that, perhaps, batteries should be made from something other than lead.

Private and public studies were commissioned to examine U.S. scrap lead collection and recycling activities and identify potential threats to the environment and public health from spent batteries that might be incinerated or dumped in landfills.

One conclusion of these studies was that, due to low lead prices and the resultant reduction in recycling capacity, battery recycling rates in the United States were considered, to some, alarmingly low. Estimates on the total number of batteries left unrecycled varied, but the results from most of the studies, including one commissioned by the Environmental Protection Agency, indicated that as many as 90 million spent automotive batteries were not recycled between 1980 and 1986.

By the time the fundamentals in the lead market changed and prices rose to fairly profitable levels, the furor to recycle spent batteries had already resulted in numerous attempts to increase collection of the batteries. This has led to several states passing or at least considering legislation requiring all wholesalers and retailers of batteries to accept scrap batteries from their customers and, generally, has increase awareness of the need for adequate secondary lead capacity to ensure that virtually all batteries are recycled in a timely and safe manner.

[SIDEBAR]

U.S. Refined Lead Production, 1980-1989 (tons)

1980: Primary (604,000); Secondary (640,000); Total (1,244,000)

1981: Primary (549,000); Secondary (637,000); Total (1,186,000)

1982: Primary (570,000); Secondary (574,000); Total (1,144,000)

1983: Primary (572,000); Secondary (498,000); Total (1,070,000)

1984: Primary (429,000); Secondary (646,000); Total (1,075,000)

1985: Primary (544,000); Secondary (628,000); Total (1,172,000)

1986: Primary (408,000); Secondary (634,000); Total (1,042,000)

1987: Primary (411,000); Secondary (725,000); Total (1,136,000)

1988: Primary (432,000); Secondary (761,000); Total (1,193,000)

1989: Primary (436,000); Secondary (835,000); Total (1,271,000)

[SIDEBAR]

U.S. Refined Lead Consumption, 1980-1989 (tons)

1980: Battery Industry (711,000); Total (1,174,000)

1981: Battery Industry (849,000); Total (1,246,000)

1982: Battery Industry (776,000); Total (1,222,000)

1983: Battery Industry (889,000); Total (1,262,000)

1984: Battery Industry (954,000); Total (1,260,000)

1985: Battery Industry (927,000); Total (1,250,000)

1986: Battery Industry (941,000); Total (1,265,000)

1987: Battery Industry (1,051,000); Total (1,327,000)

1988: Battery Industry (1,069,000); Total (1,351,000)