Our Future Together: The CARI Ottawa Convention

September/October 1988

Canadian Association of Recycling Industries members and representatives of industry, government, and environmental groups met in June to examine current recycling issues and explore their prospects for the future.

More than 300 members and guests were in Ottawa, Ontario, in mid-June for the 47th annual convention of the Canadian Association of Recycling Industries (CARI).

In one of the largest conventions in recent years, CARI members were positive about business conditions for the industry but were concerned about the growing number of environmental issues confronting processors and recyclers.

In his final report to the membership after two years as CARI president, Sidney Katzman, president of Zalev Brothers Ltd., Windsor, Ontario, said, "I have seen our industry come under increased legislation from combined federal, provincial, and municipal governments. I have seen dramatic changes, both good and bad, in the public conscience concerning recycling. I've seen the allowance of confidential rail contracts, deregulation and restructuring of Canadian rail rates, and increased participation by CARI in the employers' council on workers' compensation in Ontario--which has given industry its first voice to offset the influence of labor on compensation matters.

"I've seen the development of the most influential trade agreement in history between two neighboring countries and the increased level of competition within a shrinking global marketplace. Reflecting on this now, I can say with every degree of certainty that it has not been 'business as usual."

Katzman said the industry is constantly wrestling with problems of perception."Industry members face the realities of recycling every day," he said. Because of the millions they have invested in equipment, property, office support, and staff training, and their countless years of experience, Katzman continued, they are the experts in the field of recycling.

"In order to promote this position in the face of government legislation mandating solid waste recycling," he emphasized, "it is imperative that this association clearly articulate our perspective to our elected body of officials."

Environmental Issues and the Scrap Industry

A panel discussion of environmental issues and the scrap industry was introduced by Albert Adelstein, newly elected president of the association and chairman of the CARI Government Liaison Committee. The panel of representatives from government, industry, and environmental organizations was moderated by Rod McLeod, of the law firm MillerThompson. McLeod is also a former Ontario deputy solicitor general. He said the theme of the discussion was "to explore a solution for our future together in recycling."

Max Zalev, Zalev Brothers Ltd., Windsor, Ontario, took the opening position that wastes are overregulated. He said that manufacturers need to design their products with recycling in mind. Because of current problems with potentially hazardous materials, he explained, his plant has discontinued handling certain grades of scrap and is training employees to inspect for potentially hazardous materials in incoming scrap.

Richard Gilbert, who serves on the Toronto City Council as well as the Metropolitan Toronto Council, said that waste management should be funded by the producers of waste and should not be subsidized by the public at large. "We grossly undercharge for dealing with waste," he said, "and if we started allocating costs correctly, it would make recycling look more attractive."

Rick Lindgren of the Canadian Environmental Law Association said that activist groups and industry should work together. The association is not "out to get" scrap processors, he said, but it "doesn't want to see waste recycled if it means polluting the environment."

Gilbert called the environmental lawyer's position a dangerous point of view. The critical question is not whether scrap processors are putting contaminants into the system, he said, but whether they are reducing the amount of contaminants to which society is exposed. What processors are doing must be judged in view of the alternative to not recycling. All the alternatives must be taken into consideration and, if recycling causes the least pollution, it is the best alternative.

Gilbert said government officials are "just beginning to recognize that the recycling industry is part of the solution, not part of the problem."

Howard Goodfellow, an environmental consultant, said government agencies frequently request more data from processors, when what is needed is more sound judgment from those officials.

Responding to the complaint that environmental regulations are not being uniformly enforced throughout Canada, Dr. Meena Weese, chief of the Enforcement and Compliance Management and Emergencies branch of the Federal Department of Environment, denied the accusation, saying her branch informs industry of how the law will be applied and spells out enforcement measures.

Robert A. Breeze, manager of the Waste Management Policy section of the Ontario Ministry of the Environment, said that, for those who have recycling ideas, "the government will help fund the idea to get it going."

The Copper Roller Coaster

Hugh Blaber, senior vice-president, Noranda Sales Corporation, Ltd., Toronto, examined copper prices, saying "the outlook can only be for weaker prices, particularly in the second half of this year."

Evaluating the supply-demand outlook, he concluded that "prices will drift toward the 80s [cent-per-pound range] by year-end and the mid-70s by the summer of 1989, certainly on a three-month basis." On the other hand, he pointed out, some say prices could fall faster than expected--there is a general feeling that prices will trend downward. Additional short-selling by both trade and speculative sources could take prices down to 80 cents a pound much earlier than forecasted.

Blaber said "the LME average will certainly exceed $1.00 per pound in 1988 for the first time in history, reflecting the lower value on the dollar." However, he concluded, "the market clearly indicates prices will be higher than those expected from supply-demand fundamentals. The roller coaster ride is not over--volatility will continue. On this basis, cash prices will remain near a dollar right through next spring, as the apparent surplus of the second half of 1988 is ignored, then is needed in the first half of 1989."

Electronics Hold Scrap Potential

Jeff Caplan, Compressed Metals (1987) Ltd., Toronto, explained that "the value in electronic scrap lies in the extent to which the precious metals can be recovered in pure form. As a general rule, the higher the precious metals concentration in the scrap, the greater the economic return. As such, it almost always is economically advantageous to upgrade the scrap through some combination of segregation and preparation prior to refining."

Caplan cited three points that a processor should keep in mind when examining the scrap potential of electronics:

"The precious metal content will not be uniform since parts manufactured by one company for a particular application may vary drastically from those manufactured by another.

"Most precious metal evident in electronic scrap has been applied through an electroplating process.

"If you evaluate an item one day and see something later that looks the same, be careful not to assign it a superficial value. Any number of changes in specification thickness or design may contribute to a different precious metal content.

"As a rule of thumb," he added, "the more important the job the electronics device is expected to perform, the more precious metals the board will contain."

Caplan said most of the major refiners he is in contact with are "quite optimistic about the future of the electronic scrap industry. They acknowledge the fact that precious metal content is dropping. However, levels of precious metals currently present and the minimum level required for electronic production still make this a lucrative business. Production of computers and electronic-related equipment is expanding and the volume of electronic scrap will replace the dropping precious metals values."

Canada's Role as a Steel Producer

Roger Phillips, president of IPSCO, Inc., Regina, Saskatchewan, paid tribute to Canadian scrap processors for their ability to adapt to steel mills' demands for increasingly sophisticated scrap feedstocks. "Your industry, certainly in the ferrous field, has kept pace with modern technology. As an electric steel furnace operator, IPSCO is often asked, 'How do you maintain consistent chemistries when you are using scrap as your raw material?' Our answer is simple: A lot more easily than if we were using ore freshly dug out of the ground. In addition, of course, we can guarantee our customers that IPSCO steel has been at least doubly refined."

Looking at the world steel environment for the next 20 years, Phillips offered these observations:

"Steel consumption will initially continue to grow slowly but with high rates in developing countries. At some point, as the lesser-developed Asian, Middle Eastern, and African countries begin to get their acts together, there will be a surge in steel demand.

"Major capacity growth will come at first from Brazil and, to some extent, Venezuela, as well as from China for its own use. Later in the period other developing countries, particularly those in Africa, will get their governments and economies in hand and this will mean substantial new capacity being installed.

"Japan and Europe will be forced into further capacity cutbacks.

"There will, nevertheless, always be 'slop' in the system and capacity will outstrip consumption.

"Europe, North America, and Japan will be immunized from the pressure of low-cost steel imports to some extent. The trend to more and more sophisticated steels will preclude imports from countries that do not possess the technical infrastructure to keep on the leading edge of materials development.

"While I don't expect another major upheaval in exchange rates, no one foresaw either the drastic runup or rundown of the U.S. dollar under Reagan. Another similar happening would negate my predictions."

A major concern expressed by Phillips is the U.S.-Canadian free-trade agreement and the absence of guaranteed access for Canadian producers in the U.S. market. He said that, because the agreement does not tackle the issue of access to U.S. markets, Canadian exporters still will be unable to compete with American rivals on an equal footing and will not be able to control their prices based on demand.

In a discussion period following his talk, Phillips said that "minimills--electric furnaces--are more adept at using scrap than are integrated mills. Electric furnace operators know how to use scrap wisely in the charge."

He added that the key to using scrap is to assure that it is well graded so it is easily identifiable. He said that IPSCO separates scrap into 20 categories.

Adelstein Elected President

Albert Adelstein, president of Sam Adelstein & Co., Ltd., St. Catharines, Ontario, was elected CARI president during the convention. Emphasizing the point that "CARI members turn goals into reality," he said extensive programming and renewal of member involvement are two immediate priorities. A major effort will be for CARI to take a proactive stand on environmental issues. As part of the effort, CARI is spearheading a three-day environment symposium in March 1989.

Adelstein said he will be traveling extensively to regional meetings to give all CARI members an opportunity to provide input to the association. He said he wants every member to have a chance to speak out. With a current membership of about 240 companies, Adelstein expects the membership to total 340 companies by the 1989 convention in Quebec City.

--James E. Fowler

Canadian Association of Recycling Industries Newly Elected Officers, 1988-1989 President: Albert Adelstein, Sam Adelstein & Co. Ltd., St. Catharines, Ontario

First Vice-President: Larry Kummer, London Salvage & Trading Co., Ltd., London, Ontario

Second Vice-President: John Kis, INTERMETCO, Ltd., Toronto, Ontario

Third Vice-President: Dennis Ditlove, Inland Steel Products, Inc., Saskatoon, Saskatchewan

Treasurer: Jack Rosen, Rosen Industries, Ltd., Kitchener, Ontario

Secretary: Brian Perlman, Dominion Metal and Refining Works Limited, St.-Constant, Quebec

Immediate Past President: Sidney E. Katzman., Zalev Brothers Ltd., Windsor, Ontario

Canadian Association of Recycling Industries members and representatives of industry, government, and environmental groups met in June to examine current recycling issues and explore their prospects for the future. More than 300 members and guests were in Ottawa, Ontario, in mid-June for the 47th annual convention of the Canadian Association of Recycling Industries (CARI).