January/February 2013
Recyclers at the fall 2012 BIR conference in Barcelona report continued instability and uncertainty in the markets, though some expressed optimism for the future.
By Joe Pickard and Rachel H. Pollack
When the Bureau of International Recycling (Brussels) convened for its fall convention in Barcelona Oct. 29-30, European economic conditions seemed no better—and perhaps worse—than they were when the group met in May in Rome. Despite European leaders’ efforts to impose fiscal austerity and stimulate growth through monetary policy, the 17 eurozone countries had jointly fallen back into a recession over the summer, with the economic troubles of Greece, Italy, Spain, and other countries overpowering the lackluster growth of Germany and France. The United Kingdom, too, slipped into recession in the first two quarters of 2012, emerging with a scant 1-
percent growth in the third quarter, but with concerns about another downturn at year end. Europe’s economic pain and the lackluster recovery in the rest of the world were creating turmoil in the world’s scrap markets, according to convention attendees.
Uncertainty Weighing on Ferrous Scrap Market
Much has changed since BIR last met in Barcelona, in 2005, said BIR Ferrous Division Chairman Christian Rubach of TSR Group (Bottrop, Germany). Back then, optimism prevailed. Now, as the eurozone crisis continues to affect the business outlook in Europe overall and for steel consumers in particular, the industry faces instability and enormous uncertainty. Overcapacities among steelmakers globally and in the ferrous scrap recycling industry in developed economies have contributed to the unstable situation, he said. Despite those concerns, however, the steel and ferrous scrap industries continued to grow, reported Blake Kelley of Sims Metal Management Global Trade Corp. (New York), citing worldsteel (Brussels) forecasts that world steel production will have increased by 29 million mt and global purchased scrap apparent consumption will have increased by 3 million mt in 2012.
In the United States, scrap dealer prices bottomed out in early October before rebounding $25 to $35 a gross ton later in the month, Kelley said. At the same time, U.S. scrapyard collection volumes dropped by as much 25 percent. Steel shipments from U.S. service centers slid nearly 16 percent, month on month, in September while steel production capacity utilization fell to about 70 percent as of late October, he reported. Many industry participants were expecting even firmer scrap prices heading into November, Kelley said. Thus, they expected rebar prices to rise as well, as the major steel producers attempted to push through the first of several hot-rolled coil price hikes.
In a report on Europe, Tom Bird of Van Dalen Recycling (Sheffield, England) reiterated that 2012 has been a challenging year so far for the continent, though signs of improving markets conditions have appeared recently. Uncertainty about the eurozone, exchange rate fluctuations, the downturn in European steel demand, and shifting market fundamentals in Turkey all have contributed to the difficult conditions. But with China pushing for higher steel prices, active buying from Turkey, and the onset of winter, Bird said he did not expect scrap prices in Europe to fall below recent lows.
Though ferrous scrap consumption in the European Union dropped 3.4 percent in the first six months of the year, EU ferrous scrap exports increased nearly 13 percent over the same period, according to a report from BIR Ferrous Statistics Adviser Rolf Willeke. Among the main steel scrap consumers, only the United States and Turkey used more scrap in the first half of 2012 than in that period in 2011, up 3.2 percent and 11.3 percent, respectively, Willeke said. Steel scrap consumption in China plunged 17.1 percent, to 41.3 million mt, in the same period.
Asia seemed to be one bright spot for steel scrap exporters. China seemed to have the world’s lowest domestic steel prices, Kelley pointed out. China’s steel exports surged 21 percent higher in September, to 5.15 million mt. As Chinese steel output continued to rise into early October, Chinese scrap buyers returned to the deep-sea bulk import market after a prolonged absence, he said. South Korean activity in the deep-sea bulk import market reportedly slowed to below normal levels, in contrast, as steelmakers there relied on domestic scrap suppliers and short sea shipments from Japan and eastern Russia, he said. Steelmaking capacity is expected to rise in Indonesia, Malaysia, Thailand, and Vietnam, Kelley said, as scrap buying in the region has been active, including recent purchases in Malaysia and Indonesia.
Zain Nathani of the Nathani Group of Cos. (Mumbai, India) reported that Indian ferrous scrap imports hit a record 6.03 million mt in financial year 2011-2012, a 50-percent increase from 2010-2011. Shipbreaking remains an important source of domestic scrap in India, Nathani said, providing a record 3.9 million mt of ferrous scrap in 2011-2012. Indian scrap buyers recently benefited from the twin benefits of a stronger rupee and lower international scrap prices as global steel demand cooled, prompting additional Indian purchases of shredded scrap at attractive levels, he said. On the regulatory front, Nathani reported that the list of inspection agencies the Directorate General of Foreign Trade had previously approved was invalid as of Sept. 22, 2012. From that date forward, for shipments to clear Indian customs, pre-shipment inspection certificates must be from agencies that meet the DGFT’s newly revised criteria. BIR is working with the Metal Recycling Association of India (Mumbai) to ensure the directorate approves a sufficient number of inspection agencies, he added.
After peaking in early August, ferrous scrap prices in Japan remained under pressure heading into the fourth quarter, as price-setter Tokyo Steel cut its scrap-buying prices 13 times between mid-August and mid-October, according to Hisatoshi Kojo of the Metz Corp. (Tokyo). Expectations of weak fourth-quarter iron ore prices, continued overproduction and export dumping by Chinese steelmakers, and reduced demand from South Korean steel mills weighed on Japanese scrap tags, he added. But the return of Chinese scrap buyers to the market after the Chinese holidays also prompted some South Korean mills to procure Japanese scrap for forward shipment, putting a floor under prices, Kojo said. Though Japanese scrap exports through August were up 68 percent by volume, to more than 5.5 million tons, the sluggish world economy and steelmaking overcapacity were likely to limit upside scrap price movements until this spring at the earliest, he added.
Ferrous scrap prices in Russia also peaked in August, according to Andrey Moiseenko of Ukrmet (Doneck, Ukraine), as competition from China pressured Russian steelmakers to cut production and rely more heavily on scrap substitutes. For the first nine months of the year, Russian steel scrap shipments were down 5 percent, Moiseenko reported, although higher rail costs are resulting in a larger share of scrap moving by truck. Moiseenko also noted that Russian scrap processors have formed the first independent recycling industry association.
Compared with Russia, the market situation in Ukraine has been much more complicated this year, Moiseenko said. Restrictions on scrap exports that have prevented all but a few vessels from being loaded since August, as well as market volatility and depressed prices, contributed to a 25-percent drop, year to year, in scrap flows through September. The reduction in scrap flows is evidence that export restrictions do not guarantee an increase in domestic scrap supply, he noted.
Guest speaker Ralph Oppenheimer of Stemcor (London) provided an overview of global trends in the ferrous scrap market and the evolving role of scrap traders. The ferrous industry in Europe is “not a happy place” at present, he said. Oppenheimer asserted that scrap market fundamentals, not steel prices, are what determine scrap prices, though several economic factors affect steel prices. Looking forward, Oppenheimer predicted that the typical winter drop in scrap availability will support prices in the short term, while new investment in electric-arc furnaces and a short supply of scrap will lead to rising ferrous scrap prices in the long term.
Weaker Stainless Situation in the Fourth Quarter
Despite a positive start in the first half of the year, world stainless steel scrap demand fell in the fourth quarter, reported Michael Wright of ELG Haniel Metals (Sheffield, England), in his last conference as chairman of the BIR Stainless Steel & Special Alloys Committee. As a result of the deteriorating market conditions, global stainless steel output is not likely to reach the previously projected 33.3 million mt in 2012, he said. Wright attributed the difficult stainless recycling market conditions to weaker demand, reduced stainless scrap availability, volatile nickel prices, and falling chrome and iron ore prices.
Franck Waeckerle of Cronimet (Karlsruhe, Germany), who succeeds Wright as chairman, commented on the uncertainty currently facing the stainless industry in Europe, including the lack of progress on the proposed merger between Outokumpu (Espoo, Finland) and Inoxum (Essen, Germany). As reported in the BIR World Mirror on Stainless Steel and Special Alloys, the European Commission recently rejected the proposed merger on the grounds that the new company would have a dominant position in Europe. Although there is widespread recognition in the industry that further stainless sector consolidation is necessary in Europe, the merger remains on hold and might require the spinoff of the ThyssenKrupp Acciai Speciali Terni unit in Terni, Italy, Waeckerle said.
In the United States, stainless steel output increased 9 percent in the first half of 2012, reaching 1.22 million mt, and opportunities to sell stainless steel scrap remained decent into October, according to a written report from Barry Hunter of Hunter Alloys (Boonton, N.J.). Hunter also reported, however, that wholesale processor purchasing margins are thin, stainless scrap availability is low, and market participants remain cautious in light of uncertain forward demand. For the U.S. stainless steel scrap market, disciplined buying to retain margins could bring stability to the market, he said. Hunter also noted that the scheduled start-up of Inoxum’s stainless mill in Calvert, Ala., could change the dynamics of the entire stainless steel industry in the United States.
As the price of LME nickel rose quickly in September, processors in Asia managed to sell the scrap inventories they had built during July and August, said Bharat Mandloi of Abcom (Singapore). The recent decline in chrome and iron prices put downward pressure on 400-series scrap, however, and a lack of orders contributed to a drop in new factory scrap generation, with plants in Southeast Asia generating 30 percent to 40 percent less scrap than their optimum levels, Mandloi said. The Asian superalloy market—the titanium market in particular—has been a disappointment, he added, with end-user demand not likely to return until the second quarter of 2013. Echoing that sentiment was a report submitted by Phil Rosenberg of Keywell (Chicago) that portrayed the current conditions in the U.S. titanium and alloy markets as “not pretty” amid deteriorating aerospace demand.
In India, the sudden increase in terminal market nickel prices also provided a temporary boost in stainless scrap demand, but domestic orders for stainless steel have been weak, with mills operating at only 70 percent to 75 percent capacity, according to Anand Gupta of Ambica Steels (New Delhi). Though stainless scrap availability has been limited, Gupta indicated the Indian mills are maintaining low stainless scrap inventories. In contrast, Ildar Neverov of Steelway (Moscow) reported that plenty of stainless steel scrap has been available in Russia this year; the problem has been the limited number of options for delivery. Neverov described the domestic situation in Russia as “not healthy” and said taking material out of Russia remains a “headache,” with only 15,000 to 20,000 mt of stainless scrap likely to be shipped out of Russia in the remainder of 2012.
While addressing a wide range of stainless-related issues, including global production and scrap availability, the growing importance of Asia, China’s use of nickel pig iron, the changing market dynamics in the United States, and the environmental benefits associated with using scrap instead of primary material, Wright asserted that stainless steel scrap will continue to have an advantage over primary products due to its price and smaller environmental impact. He predicted that stainless scrap demand will grow 4 to 5 percent a year over the long term.
Nonferrous Markets Increasingly Tied to Global Economy
The fragile state of the global economy and the increasingly globalized marketplace have coincided with a nearly universal downturn in the nonferrous sector this year, according to BIR Nonferrous Metals Division President Robert Stein of Alter Trading Corp. (St. Louis). Stein described how the squeeze in margins across the entire nonferrous recycling chain has, in part, been the result of too many people chasing too few pounds of material. But greater market transparency in recent years has provided the industry with unprecedented opportunities, he added. He encouraged industry efforts to actively promote the benefits of scrap recycling at a time when the industry continues to confront protectionist barriers and “uninformed” press reports. Looking forward, Stein expressed the hope that 2013 will provide a more stable and sustainable platform for future scrap industry success.
At the nonferrous session, BIR International Trade Council Chairman Robert Voss of Voss International (Rickmansworth, England) reported that international scrap theft and fraud have not receded and might actually be on the rise. Voss encouraged BIR members to make full use of the BIR arbitration system, noting that revisions in the arbitration rules were recently finalized.
Andy Wahl of Newell Recycling (East Point, Ga.) summarized the regional reports submitted by Nonferrous Division board members. Though Chinese inflation seems to be under control for now, scrap metal consumers in China are adopting a wait-and-see attitude, Wahl said. Copper prices in China are likely to find support around $8,000 (RMB 58,000) a mt. Demand for copper and aluminum scrap from European consumers has been falling, due in part to the economic crisis, Wahl said, but the German aluminum industry in particular has a positive outlook heading into 2013.
In North America, mill buying seems to be slowing down, as the largest customers seem to have most of the metal they need, though sales appear to be somewhat easier to make on the extrusion side, Wahl said. Looking at the rest of the Americas, the Brazilian economy has been moving sideways as of late, Wahl reported, with GDP expected to expand only 1.5 percent in 2012 as industrial output is forecast to contract 2.3 percent. In 2013, however, the country’s economic expansion is expected to accelerate to 4-percent growth. In Mexico, local demand for secondary aluminum remains healthy, Wahl reported, but Chinese demand for copper scrap has dropped off sharply as of late. Potentially higher value-added taxes in Mexico could lead to a distortion in local scrap prices, he added.
In South Africa, violent strikes and labor unrest have posed a significant challenge to the mining industry, while sluggish economic growth has contributed to a 20- to 30-percent decrease in scrap collection, Wahl said. Further, export duties are likely to re-emerge in the near future as an issue in that country. In the Middle East, despite the ongoing political tensions, October was a good month for regional nonferrous scrap collection and sales.
Guest speaker Christopher Stobart of CRU Group (London) delivered preliminary results of the BIR-commissioned study on nonferrous metal scrap flows. Primary nonferrous metal demand has grown steadily over the past decades, Stobart reported, especially for aluminum, demand for which nearly doubled between 2000 and 2011. China was the primary reason for the increase in metal demand, he said, noting that the surge in global ferrous scrap consumption has dwarfed the increase in worldwide nonferrous scrap demand. Stobart proposed that as aluminum demand has increased, scrap supplies have been unable to keep pace, resulting in an aluminum “scrap gap” since 2001. Though nonferrous scrap market dynamics are constantly changing, scrap is the fastest-growing sector in the metals sector, and the scrap recycling industry will only become more important as the years go by, Stobart asserted.
Norberto Vidaña of Nemak (Etxebarria, Spain) spoke on aluminum procurement strategies for the automotive casting business. An aging fleet and ample credit availability will contribute to growth in the U.S. automotive market next year, he predicted. Meanwhile, auto sales in China are expected to keep pace with the recent trend in that country, driving light vehicle sales there to grow 9 percent annually between 2011 and 2016. As auto demand in the Americas and Asia continues to grow, aluminum demand is also expected to advance, he added. Most analysts are predicting aluminum demand will continue to slowly improve in 2013, resulting in higher aluminum prices, Vidaña said.
Quality Issues Affect European Paper Demand
Though experts predict China’s GDP will grow only 7.5 percent in 2013—its slowest growth in a decade—that country will continue to drive exports of recovered fiber, said Ranjit Baxi of J&H Sales International (London), president of BIR’s Paper Division, at the paper roundtable. European paper exports to China rebounded in 2011 after a drop in 2010, but the United States is filling an increasing share of China’s recovered paper needs, he noted. “The dollar is too weak, the euro is too strong, [or] we’re not doing the right things” to increase European scrap paper exports to China, he said.
Baxi reviewed some of the factors that affect recovered paper exports. Freight rates stabilized in the fall after a year in which they had increased 500 percent, he said, but weakening global trade in 2013 could lead to the dry-docking of some smaller vessels, which could reduce space and container availability and increase freight prices. Increased inspection controls affect exports, especially those of lower grades, Baxi said, noting Indonesia’s new inspection program and tighter inspections in China. This trend hits European paper recyclers especially hard due to persistent quality concerns with their material, he said. “Quality and price are the prime focus for the mill buyer,” he said, and in Europe, “delivering the right quality for the right price is a challenge for us.”
The recovered paper that remains in Europe is declining in quality as well, said guest speaker Nuno Messias, raw material manager of Europac (Madrid), a producer of corrugated board and kraftliner that also operates waste, recycling, and energy generation facilities in Spain, France, and Portugal. Europac now finds dry rejects are double the acceptable levels, he said, which affects mills’ costs, as they must pay to landfill or incinerate the nonpaper materials they receive. “For each kilo I get, I have to throw away another 4 kilos,” he said. Spanish mills are working to coordinate their response to the quality problem, he added. High labor costs, low margins, lower volumes, and competition are all affecting recyclers’ ability to improve quality, noted Francisco Donoso of ALBA Servicios Verdes (Madrid).
The European economic crisis seems to have hit paper recyclers in Central and Southern Europe the hardest. Those in Italy and Spain are experiencing slow market conditions and a slump in consumption, Donoso reported. In Spain, the result has been tight competition for supply and higher prices, despite soft Asian demand, though Chinese demand increased in September. Dominique Maguin of La Compagnie des Matières Premières (Paris) said French third-quarter collection of recovered board was still weak, with higher spot prices appearing domestically in September as paper mills tried to restore normal stock levels. German mills’ stocks also were low, though prices there remained stable. Eastern European paper recyclers reported low stocks in the third quarter as well, reported Jaroslav Dobes of Remat (Brno, Czech Republic).
In contrast, British mills reported high stock levels in the third quarter, with producers not purchasing spot tonnage, Maguin said. Lower-quality UK producers were still struggling to find markets despite growth in demand toward the end of the quarter, he added. UK paper recyclers reported new Chinese and Indian demand for sorted office waste, along with continued European demand, leading to robust order levels and prices equal to or higher than that of multigrade.
Recyclers in Northern Europe also had some positive news. In Finland, recovered paper demand remained strong in the third quarter, said Lars-Gunnar Almryd of IL Recycling (Stockholm). He noted that the collection of brown grades was stable and is expected to increase because of more online shopping. In Sweden, domestic kraftliner mills were expecting full production in the fourth quarter, though newsprint mills are facing a tough market, Almryd said, noting closures in Sweden and Denmark.
Merja Helander of Lassila & Tikanoja (Helsinki), president of the European Recovered Paper Association (Brussels), reported that the European paper recycling rate—as measured in the 27 countries of the European Union, plus Norway and Switzerland—hit 70.4 percent in 2011, though the volume recovered, about 58 million mt, was nearly the same as in 2010. Messias noted the recycling rate has grown an average of 5 percent a year over the past 20 years, and with some individual countries achieving even higher recycling rates, “the potential for growth is still very significant.” Recovered paper faced a setback in its efforts to achieve EU end-of-waste status, however, when it failed to pass a technical adaptation committee vote in July, but Helander said she expects the process to reach a successful conclusion in early 2014 if not sooner.
Guest speaker Björn Voigt, managing partner of Active M&A Experts (Düsseldorf, Germany), spoke about the benefits and challenges of merging scrap recycling companies and advised those considering such a move to get professional assistance. He predicted that the difficulties of complying with strict environmental laws, as well a lack of successors in family-owned companies, are likely to result in more scrap company mergers and acquisitions.
Proving Scrap Tires Are Not Waste
The European tire recycling industry could save n1 billion over the next decade by having scrap tires and tire materials declared products and not waste through the EU end-of-waste framework, said Barend ten Bruggencate, consultant of the board for Kennis Centrum (Leiden, Netherlands) and chair of the BIR Tire Division, and guest speaker Jean-Pierre Taverne, technical coordinator for end-of-life tires for the European Tire & Rubber Manu-facturers Association (Brussels), at the tires roundtable. Treating scrap tires as waste increases the administrative and financial burdens of collecting and transporting them, especially across national borders, they said, because EU member countries differ in whether they consider whole scrap tires or various materials derived from them waste or products. For example, powdered rubber is a waste in France and a product in Germany; retreaded tires are a waste in the UK but a product in Italy, Taverne explained.
Both speakers emphasized that scrap tires meet the basic objectives of the end-of-waste law. Further, all of the major uses of scrap tire materials are “net environmental gains,” Taverne said, primarily by offsetting carbon dioxide emissions alternative materials would have generated. A Dutch study from 2011 concluded that recycling 1 mt of scrap tires saves the equivalent amount of carbon dioxide emissions, ten Bruggencate said.
The 27 EU member states, plus Norway and Switzerland, generated about 3.3 million mt of used tires in 2010, five times the volume of 18 years ago, ten Bruggencate said. The continent leads the world in recovering those tires, capturing 96 percent of that volume in 2010, a significant improvement from the 51 percent recovery rate in 1996, Taverne said. From 1996 to 2010, the proportion of scrap tires used for fuel doubled, from 20 to 40 percent. About 1.1 million mt, or 92 percent of that material, went to cement kilns in 2010, Taverne said. The proportion of scrap tires being recycled into new products grew from 11 percent to 38 percent in that same time frame. Eighty percent of that material—about 1 million mt—was granulated in 2010. About 50 percent of the granulate goes into synthetic turf fields, he said.
Since an EU directive banned the landfilling of whole and shredded end-of-life tires in 2006, 16 European countries have taken an extended-producer-responsibility approach to tire recovery. Fifty-seven percent of recovered scrap tires come from countries with EPR systems, 41 percent come from countries that use market-based approaches, and 2 percent come from countries that use the tax system to ensure scrap tires are recycled, Taverne said.
Plastics Focuses on Quality, Protectionism
“I see black clouds on the horizon” for the international trade of plastic scrap, warned BIR Plastics Division Chair Surendra Borad of Gemini Corp. (Antwerp, Belgium). Scrap plastic exports from Europe are “stagnating,” he said, and those from the United States were down 18 percent in the second quarter of 2012 compared with that period in 2011. Contributing to this decline, he said, are China’s strict enforcement of import regulations and Malaysia’s ban on European scrap plastic imports. He also warned against protectionist efforts, which can result in domestic oversupply, lower domestic prices, and less collection, he asserted. Borad expressed concern about the growth in U.S. polyethylene terephthalate bottle recycling capacity and in the expected fivefold growth in the production of biodegradable plastics, which could have “serious implications for the industry” by contaminating the recycling stream.
According to Plastics Europe (Brussels), the association of plastics manufacturers, out of the 25.1 million mt of European plastic scrap generated in 2011, about 40 percent was landfilled, 34 percent went to energy recovery, and 25 percent was recycled, Borad said. Of the 6.4 million mt recycled, 3.4 million mt was exported while the remainder stayed in Europe. Though the value of the exported material increased 6.2 percent from 2010 to 2011, the volume was flat compared with 2010, he said.
Grégory Cardot of Veolia Propreté France Recycling (La Plaine St. Denis, France) called the European plastic recycling market “morose.” Virgin prices fell through July, increased through the summer, and fell again in September in a decline that he expected would last into November. Cardot reported a decline in European polypropylene demand but “sustained” demand for polyethylene films, including the development of new capacities to consume “export quantities.” Though France is becoming a destination for European PP and PE, supply could become a problem due to less collection and strong prices for buyers, he said. The European PET bottle market remains difficult, he said, while collection volumes are not meeting demand for white PVC, which is putting pressure on prices. The Asian market for European scrap plastic was “weak,” he said, with lower margins and stagnating markets for low-density polyethylene. He also noted the “more scrupulous” customs controls in China, though French PET bottles remain in high demand in Asia due to their cleanliness and sorting quality, he added.
Despite the gloomy picture Cardot gave for Europe as a whole, Dutch and German markets were good, according to a report by Peter Daalder of Daly Plastics (Zutphen, Netherlands) that Borad delivered. Daalder attributed the strong markets to the weak euro and high polymer prices driven by oil shortages and Asian demand—all factors that could change, he noted. Chinese buyers are “focused on quality more than quantity,” Daalder wrote, noting that “prices are being made in Asia for the top-quality material.” German and Dutch collections were down due to the crisis in building activity, he added.
Currency fluctuations are aiding the Indian plastics market, too, with the rupee up 6 percent in early fall, which has led to more imports, Borad said. Sea freight rates have been stable, but labor costs for recycling plastic have grown 50 percent in the past year, he added. Borad criticized the Indian government for not participating in recent Basel Convention preparations [see “IEC Addresses End-of-Waste Implications for Scrap” on page 123], noting that the country still sees scrap as waste, not a valuable resource.
Borad also delivered a U.S. report by Michael Schipper of International Alloys (Mendham, N.J.). Demand for common grades was stable in the second half of the year, Schipper wrote, though purchasing commitments were tightening, as they had at the end of 2011. As Borad noted, the United States is now processing more than half of its recovered PET bottle volume domestically, up 18 percent from the previous year. “Sufficient supplies provide [U.S.] consumers with an abundance of high-grade materials, pushing lower-quality materials abroad for further processing in less costly labor markets,” Schipper reported. Two Chinese regulatory proposals could make it difficult to find export markets for lower-quality or more obscure materials, he said. The first would ban imports of unwashed postconsumer plastics; the second would ban the sale of imported plastic scrap to Chinese companies that are not licensed to import it.
Guest speaker Antonio García Gleiser with Marepa-FCC Ámbito (Madrid), an environmental services company that operates across Spain and in other countries, gave an overview of the country’s plastic production, consumption, and recycling. Both production and consumption have fallen since 2008, though production has rebounded somewhat since then, he said. In 2010, Spain recycled more than 29 percent of the plastics in its waste stream, up 13 percent from 2007, he said, but “there’s still work to be done.” He urged plastics manufacturers and recyclers to improve that rate, noting Spain recycles nearly 70 percent of its paper in comparison.
A second guest speaker, Christian Elvers, a business development manager with Fr. Meyer’s Sohn (Valencia, Spain), gave the history of Spanish transportation and its ongoing opportunities and challenges. Most Spanish plastic scrap exports go to China, including Hong Kong, though Germany, Italy, Malaysia, and India are other destinations, he said. Elvers also described the variety of services freight forwarders can provide.
IEC Addresses End-of-Waste Implications for Scrap
Changes in the European and international regulatory environment have potentially far-reaching effects on the scrap recycling industry, according to speakers at BIR’s International Environment Council meeting. Alicia García-Franco, director general of the Madrid-based Federación Española de la Recuperación y el Reciclaje (FER), gave an update on the end-of-waste process, which a 2008 EU directive created to determine the conditions under which a recovered material ceases to be waste. The first step is confirming the material has undergone “a recovery operation” such as recycling and (1) is commonly used for specific purposes, (2) has a market or demand, (3) meets specific technical and legal requirements, and (4) does not have an adverse impact on the environment or human health, she explained. Once a material is found to meet those objectives, a regulation sets the criteria under which the material ceases to be waste and becomes a product. The regulation for scrap iron, steel, and aluminum was developed in October 2011.
The regulation for those metals is “not so complex,” García-Franco said, and “it’s not difficult to comply.” It specifies the material must meet certain quality, input, and process criteria; the processor must have a quality management system; and the material must come with a statement of conformity. “The same materials can be a waste or a product” depending on whether the processor meets those requirements, she said, adding that the regulation recognizes the value recyclers add to scrap by sorting, cleaning, and processing it. The EOW regulations for scrap glass, copper and copper alloys, paper, and tires are in progress, she said.
García-Franco pointed out that the EOW process is voluntary, and “not all scrap material will cease to be waste.” She also addressed some potential implications of a processor seeking EOW status for its material. Exports must comply with different regulations whether they’re waste or products, for example, thus going through the process is “a good solution for transboundary trade,” she said. If the scrap is a product, however, it must comply with the registration, evaluation, authorization, and restriction of chemical substances law (REACH). Further, right now, “smelters will not pay more if it’s a product and not waste.” IEC Chairman Olivier François of Galloometal (Menen, Belgium) expressed a concern that protectionism will result in laws that prevent the export of European scrap metal that’s considered waste. Having material that’s a product, not a waste, “could be insurance for our companies to keep us safe to continue to export worldwide,” he said. He and other IEC members noted that individual countries differ in what quality management system they will accept as proof a processor meets the EOW criteria.
Ross Bartley, BIR’s environmental and technical director, updated the committee on a technical working group’s preparations for a Basel Convention conference in 2013 that will address the environmentally sound management of wastes. With no consensus on the fundamental issues of what’s waste, what’s not waste, and what’s hazardous waste, the scrap industry’s concern is that the agreement could “catch recycling under hazardous waste,” or it “could end up addressing nonhazardous [waste], which to date has been outside its scope,” Bartley said. The technical group also is defining what will constitute environmentally sound management and whether the criteria will differ whether the facility is in an industrialized or nonindustrialized country. Bartley also reported on the progress of a nonbinding UN agreement on the transboundary movement of scrap metal with inadvertent radioactive content.
Joe Pickard is chief economist and director of commodities for ISRI, and Rachel H.
Pollack is editor-in-chief of Scrap.