July/August 2011
Optimism prevailed at BIR’s spring 2011 convention in Singapore, with speakers generally bullish on the major scrap commodities and very much focused on the future of the Asian markets.
By Joe Pickard and Rachel H. Pollack
Singapore’s 4.8 million people live, work, and pursue the unofficial national pastimes of eating and shopping on just 269 square miles of land, making the country one of the most densely populated in the world. To make room for everyone, this modern, prosperous country has constructed more than 4,300 high-rise buildings, some of which tower 70 stories, or more than 900 feet, into the air. From the three 55-story towers of the Marina Bay Sands resort to the ION Orchard complex, an eight-story shopping mall topped by 48 floors of residences, Singapore’s skyscrapers create a distinctive skyline in almost any direction, giving visitors plenty of reasons to be looking up.
Also looking up, figuratively, were the prospects for the major scrap commodities at the spring BIR convention, held at Singapore’s Shangri-La Hotel May 23-25. Growing demand and tight supplies were leading to higher prices for a variety of secondary materials, according to conference participants. They expressed some concerns about high oil prices, currency issues, and other factors contributing to market volatility, but most speakers reported a decent to good start to the year and expectations for continued market strength. BIR’s first conference in Southeast Asia, which drew 1,200 delegates and 300 other attendees, featured speakers from the host country and neighboring Malaysia and Indonesia, an official from China’s nonferrous metals industry association, and a wide array of other speakers with expertise on Asia, Europe, North America, and the Middle East. Here are a few highlights from the event.
Riding the Stainless Roller Coaster
The global stainless steel market has been on a bit of a “roller-coaster ride” since the end of 2010, said Michael Wright of ELG Haniel Metals (Sheffield, England), chair of BIR’s Stainless Steel & Special Alloys Committee, at that committee’s meeting. After a lack of purchasing interest in the fourth quarter of 2010, the stainless market came back in January, Wright reported, as demand increased, inventories were replenished, and scrap availability managed to keep up with demand. Even though the market has been in good shape over the past six months, and global stainless steel output this year will most likely exceed the 33 million mt produced in 2010, Wright sounded a more cautious note for 2011’s third-quarter prospects.
Reporting on market conditions in India, Anand Gupta of Ambica Steels (New Delhi) noted that the country’s elimination of a 2.5-percent customs duty on stainless steel scrap has led to higher import demand. At the same time, healthy export orders are boosting demand for Indian stainless steel, with mills there operating at nearly 100-percent capacity. Demand for stainless steel has been good in the Middle East, too, despite the civil unrest in the region, said Ahmad Sharif of Sharif Metals (Amman, Jordan). Rising infrastructure investments bode well for future demand, he added, giving as an example the expected $100 billion investment Qatar will make in infrastructure in preparation for its hosting the 2022 World Cup.
Market reports from other regions were somewhat more mixed. In the United States, the stainless market reportedly cooled in the second quarter of 2011, according to Danny Fischer of Shapiro Metals (St. Louis). The recent momentum in the U.S. stainless steel market slowed as mill orders decreased, scrap purchasing fell, and service centers turned to buying on an “as-needed” basis, he said. Scrap demand also is off across Asia, the region that produces 50 percent of the world’s stainless steel, said Mark Sellier of OneSteel Recycling (Hong Kong). Stainless steel mills were running at 70 percent to 80 percent of capacity in China and 60 percent to 70 percent of capacity in Taiwan and South Korea, he said.
In his Europe report, Wright stressed that ArcelorMittal’s spinoff of 2.5 million mt of stainless steel production capacity is leading to a restructuring of the European stainless market. Incoming orders started to slow in Germany in April, and that reduced scrap supply could meet with lower mill demand soon, he said. As it was in Germany, demand in France, Belgium, and Italy had been strong in the first quarter, but those markets might be showing signs of weakness and diminishing scrap supply heading into the summer months, Wright said. Italy in particular is facing increased import competition from China. Mills in Scandinavia, in contrast, are enjoying a good local supply of scrap while operating at approximately 80 percent of production capacity, he said.
Stainless scrap consumption in Russia has been growing, said Ildar Neverov of Steelway (Moscow), but government efforts to limit stainless scrap exports to just three small ports—Kaliningrad, Azov, and Magadan—none of which is really suited to stainless exporters’ needs, has been a pressing industry concern. So far, a strong lobbying effort by scrap companies has held off the move, he said.
In a report on high-temperature alloys, Phil Rosenberg of Keywell (Chicago) was cautiously optimistic, predicting “good times ahead.” He noted “very good” demand from the aerospace industry for titanium nickel alloys, calling the sentiment of that industry “as bullish as I’ve ever heard,” despite high oil prices. In fact, the aerospace industry expects high oil prices to lead to improved demand for energy-efficient engines, he said. Rosenberg also reported positive nickel-alloy demand and relatively tight scrap availability.
Looking at the world nickel market, primary nickel consumption could increase 5 percent and nickel production could expand 10 percent this year, said Dmitry Kuznetsov of Norilsk Nickel (Moscow). Although Kuznetsov said he expects the world nickel market to be “close to balanced” this year, a modest surplus could occur in 2012 depending on the price of nickel and on nickel pig iron production. Global primary nickel consumption grew an average of 3 percent a year between 1995 and 2010, he said, and it’s likely to continue to grow 3.6 percent to 5 percent a year in the next 15 years, resulting in 1 million mt more of primary consumption in 2025 than in 2010. Growth is likely to come from domestic demand in India and China as well as the aerospace, energy, and battery sectors, he said.
China continues to dominate the world stainless steel market, according to Markus Moll of Steel & Metals Market Research (Pflach, Austria). Chinese demand for stainless has been growing at more than 20 percent a year as demand from the rest of the world grew by a more modest 3 percent. While noting that overcapacity for stainless production had reached 6 million mt in China alone last year, Moll pointed out that NPI acts as an “invisible hand” in the nickel market, setting the metal’s floor and ceiling prices. Even with the risk of China flooding the world with stainless steel exports, the long term outlook for stainless remains bright, Moll said, with expectations that the global end-use market will exceed 40 million mt by 2020.
A Positive Ferrous Outlook
“Political turmoil, natural disaster, and currency fluctuation” were factors in the “undulating” market for steel in the first half of 2011, said Tom Bird of Van Dalen Recycling (Sheffield, England), but he and others at the Ferrous Division meeting had a more sanguine outlook for the remainder of the year. Christian Rubach of TSR Group (Bottrop, Germany), BIR Ferrous Division president, briefly reviewed the recent turmoil in the financial and oil markets while noting that steel production in China is on the rise and steel demand in Turkey has been increasing at a time of relatively low steel scrap availability. Market sentiment cooled in Europe in early 2011, Bird reported, following healthy demand and tight scrap supply in late 2010. But by May the prices for heavy melting steel were mostly steady to higher, as Turkey did not cut back on production. He summed up the European picture, saying “finished product demand remains healthy, and we are expecting demand for scrap to remain strong for the immediate future.” Reporting on the United States and the Pacific Rim, Blake Kelley of Sims Metal Management Global Trade Corp. (New York) stated that the consensus is for U.S. ferrous scrap prices in June to stay at or above May levels. The prime grades are looking especially likely to increase, he noted, as transportation problems caused by Midwestern flooding and difficulty obtaining railcars are making it hard to meet shipping commitments. Turning to Asia, Kelley reported aggressive buying in China and South Korea, but domestic and export prices were down in Japan due to falling output. World raw steel production increased 1 percent in April, Kelley said, and for all of 2011, global production is likely to increase by 111 million mt, including 48 million mt of additional purchased ferrous scrap. He called it an “interesting beginning to the year,” noting that “no one is buying more steel and scrap than they need, just enough supply for demand.”
Though it’s not dependent on scrap for steel production, India is in an expansion mode, said Ikbal Nathani of the Nathani Group of Cos. (Mumbai, India). The country’s steel output is likely to increase from 67 million mt in 2010 to 75 million mt this year and to reach 115 million mt in 2014, he said. Despite this production growth, Nathani expects India to import 15 percent to 20 percent less ferrous scrap in the future due to growth in sponge iron production and its extensive supply of scrap from shipbreaking activity. India has the largest shipbreaking industry in the world, he said, with about 100 vessels currently on the shipbreaking beaches of Alang. Nathani briefly detailed the difficulties the industry has had with India’s Directorate General of Foreign Trade, which has imposed “strict inspection norms” on all shipments to block radioactive or otherwise hazardous wastes. DGFT has recently blacklisted some inspection agencies for issuing bogus pre-shipment inspection licenses, he added.
Turning to Japan, Hisatoshi Kojo of the Metz Corp. (Tokyo) reported that the country’s situation is still unpredictable and steel consumption remains sluggish in the aftermath of the March earthquake, tsunami, and nuclear crisis. The scrap market has softened in Japan since the end of April, Kojo said, and the country expects a slow patch this summer due to weak demand at home and abroad, but the scrap market is likely to pick up in the second half of the year.
Reporting on Russia and Ukraine, Andrey Moiseenko of Ukrmet (Kiev, Ukraine) characterized the market as once again exhibiting “good demand and reasonable prices” after the recent economic crisis. Although ferrous scrap collection in Russia looks better this year, the scrap market has yet to return to its pre-recession levels. The Russian government’s proposal to limit the number of ports allowed to export ferrous scrap, poor weather conditions, and the strength of the ruble affected export volumes earlier this year, he said. Moiseenko also noted that Ukraine, experiencing low scrap stocks, had become a net importer of ferrous scrap for the first time in February.
Featured speaker and Singapore-based “commodity guru” Jim Rogers entertained the ferrous audience, telling them that scrap recyclers “will be very rich” because recyclers are in the right place at the right time: Raw materials are in short supply at a time when billions of consumers around the world are boosting demand. Rogers said he expects the bull market in raw materials to last until 2018 or 2020. Other notable trends Rogers addressed were the rise of China and the rest of Asia as world economic powers and the likelihood of the U.S. dollar to experience sustained weakness, diminishing its role as “the world’s currency.”
The BIR Ferrous Division also announced the official publication of the second edition of World Statistics on Ferrous Scrap, which BIR Ferrous Statistics Advisor Rolf Willeke compiled. The edition, which covers the 2006-2010 period, shows that global ferrous scrap consumption increased 15 percent in 2010, to 530 million mt, as scrap use increased 18 percent in the European Union and 4 percent in China.
Advances in Post-Shredder Separation
European shredder operators and equipment manufacturers at the BIR Shredder Committee meeting described their latest efforts to further separate shredded scrap materials. Such efforts could help recyclers reach European Union mandates for recycling end-of-life vehicles and reduce the free copper in scrap steel. Scrap processors want to reduce the free copper in their steel to 0.2 percent or 0.25 percent while using fewer hand pickers, explained Jörg Schunicht of TiTech (Mülheim-Kärlich, Germany). By doing so, they hope to reduce labor costs, recover more valuable copper, and be named a preferred steel mill supplier, which they believe will lead to their receiving higher prices for their steel, he said.
Olivier François of the Galloo Group (Menen, Belgium) described the AdRem advanced recycling system, a joint venture of Galloo and Valtech Group. The most innovative piece of the system, he said, is the patented bidirectional trommel separator for dense media separation and collection of sinks and floats. When used on low-density media, it separates organics such as wood and plastic from nonferrous metals, glass, and stones, then it can further separate the organics to generate clean plastic granulate. As part of an ELV processing system at one Galloometal plant, which processed 100,000 mt in 2008, the company achieved a 90.8-percent separation efficiency in its own tests and a 90-percent efficiency in a test by Terra-Peugeot-Citroen (Paris), François said.
The Galloometal plant also uses the TiTech x-tract, which combines an electromagnetic sensor for shape recognition and an X-ray fluorescence sorter to separate copper-containing motors, or “meatballs,” from shredded ferrous scrap, Schunicht said. The XRF technology has advanced from requiring 2 to 5 seconds per detection to identifying 4,000 to 5,000 objects per second, he said, as the material moves past it at 3 meters per second. The system can’t detect light elements, however, due to the atmosphere between the object and the sensor. With the additional equipment, the Galloo facility achieved copper recovery equal to or higher than what it achieved with two or three manual pickers, he said. He suggested that combining the equipment with hand-picking could achieve even better results.
Uwe Habich of Steinert Elektromagnet bau (Cologne, Germany) described that company’s latest equipment for nonferrous recovery. The Finesmaster combines a magnetic head pulley and sensor sorters to separate ferrous and nonferrous fines. To separate insulated wire from shredded scrap, Steinert offers two approaches, Habich said: A trio of induction sensor sorting machines can maximize the recovery of all metals, whereas two ISS machines paired with a 3D Sensor Sorting System, which uses a laser and camera to calculate object height, shape, and volume, can maximize product quality by pulling a clean stream of insulated copper wire. Habich also described Steinert’s FSS/KSS color-sorting system, which can separate material based on color and brightness as well as size and shape. The company partnered with Olympus Innov-X (Woburn, Mass.) to develop its XSS XRF machine to separate denser material from lighter material, such as when pulling aluminum from heavier nonferrous metals, separating stainless steel or aluminum alloy grades, or pulling copper meatballs from ferrous scrap. It can perform the latter task at the rate of 150 mt per hour, he said.
Representing the European Shredder Group, Manuel Burnand of Coframetal (Paris), the group’s chair, noted that shredders fall under the European Union industrial emissions directive, thus “the industry must find ways to reduce air, water, and noise emissions and increase energy efficiency.” The European Commission will be conducting a questionnaire to determine the existing state of emissions and later will compile information on best practices, he said.
Nonferrous Markets Remain Volatile
Both fundamental demand and speculative interest in nonferrous metals have increased since the October 2010 BIR meeting in Brussels, said Nonferrous Division President Robert Stein of Alter Trading Corp. (St. Louis) at the division meeting. Chinese imports of copper scrap increased 1.9 percent in April as import duties in China fell and the yuan hit an all-time high against the dollar, said.
Michael Oppenheimer of Brookside Metal Co. (Willenhall, England) in his overview of world nonferrous scrap markets. Despite those positive signs, “most funds are pessimistic about the coming months” regarding Chinese demand, he said. Oppenheimer also highlighted the high level of “volatility and chaos” in the Indian market, with that country experiencing high interest rates and petroleum prices and a relatively high rupee against the dollar. Recent harassment of recyclers in Mexico by the Mexican federal authorities in the name of investigating copper theft is resulting in “shippers, shipping lines, and consignees skipping Mexican ports,” he said. Though the Mexican peso and Brazilian real are both gaining ground against the U.S. dollar, inflation and currency volatility are both concerns in those countries. Instability in the Middle East has affected collection rates in that region, he added. Turning to Europe and North America, Oppenheimer reported that April’s 18-percent rise in automobile sales in the United States was good news for domestic Twitch consumption. Copper scrap spreads in both the United States and Europe have narrowed as scrap availability has decreased in response to volatile pricing. Volatility is “stifling the scrap trade” in Europe, he said.
Six guest panelists addressed whether copper is “the new gold,” as the title of the panel discussion put it. Christian Schirmeister of J.P. Morgan (London), chair of the London Metal Exchange’s Copper Committee, said he expects copper prices to remain volatile, but he doesn’t expect prices to collapse in the next two to six years due to growing demand. Chinese copper demand appears to be picking up, he said, as the scrap supply in China and globally has been improving in conjunction with the accelerating copper scrap cycle, which he attributed to more private consumption of copper in consumer products. China’s tight money supply has led to the use of copper for arbitrage and as financial security for unrelated purposes, he noted, but that trend won’t continue indefinitely. That copper “will find its way to a consumer in six to 12 months,” he predicted. Schirmeister also highlighted the increased interest from financial institutions in owning warehouses, while noting that the LME has yet to establish a warehouse in either India or China.
Picking up on the China theme, Shanghai-based journalist, blogger, and frequent Scrap contributor Adam Minter outlined the development of the scrap industry in China over the last 25 years. Nonferrous scrap did not head to China just because of the country’s low labor costs and lax environmental regulations, he pointed out. It took the country’s economic liberalization and the rural-to-urban migration of its population to drive up demand for copper for infrastructure and housing. Accordingly, he stressed the close relationship between China’s copper scrap consumption and its GDP growth. Minter also explained how the “variable application of duties at different ports” has affected the flow of scrap into the country, and he outlined some recent trends: the rapid rise in speculative interest in copper scrap, and, most recently, the start of a shift from labor-intensive manual scrap processing to mechanized scrap processing.
In contrast with the growing copper demand in China, copper scrap consumption in the United States has experienced a drastic decline in the last 20 years, said Glen Gross of Wimco Metals (Pittsburgh). Although there’s plenty of copper scrap in the country, there are basically no domestic markets, he pointed out, due to government restrictions and manufacturing losses. The United States used to have eight smelters of No. 2 copper; now it has none, he said. With No. 1 copper, 50 percent gets exported. Other U.S. trends include consolidation on the supply side, the larger role that nonferrous operations are playing in today’s scrap recycling industry, and the greater emphasis on risk management. Gross also stressed the influence of hedge funds, commodity indices, and other “ghosts” in the business, which he said are overshadowing or masking the fundamental supply and demand factors, contributing to an increasingly challenging business climate.
Reporting on copper scrap consumption and trading in Latin America, Alejandro Jaramillo of Recicladora Cachanilla (Tijuana, Mexico) also noted the close correlation between GDP growth and copper consumption in the countries in that region. Jaramillo provided an overview of copper scrap trade and consumption patterns in Brazil, Mexico, and other key economies in the region, stating that the market oligopoly and high-risk scrap processing environment have hindered the scrap industry’s development in Mexico.
Miguel Garcia of La Farga Lacambra (Barcelona, Spain) highlighted the benefits of producing copper from scrap, which include significant reductions in sulfur dioxide and carbon dioxide emissions, solid waste generation, water consumption, and energy savings. In response to a question from the audience, Garcia asserted that copper scrap can be used virtually interchangeably with refined copper to produce copper products.
Carlos Risopatron of the International Copper Study Group (Lisbon, Portugal) provided an overview of recent global trends in refined copper and copper scrap use. Copper scrap use experienced a strong recovery in 2010, he said. It’s now at 50 percent of the level of primary copper production. He also described recent patterns in the global trade of copper scrap and examined China’s increasing role in the global copper scrap market. With copper mine expansion delays affecting primary copper supplies in the medium term, Risopatron stressed scrap’s leading role in the growth of the global copper supply.
Record Prices for Recovered Paper
Asian paper demand has been strong, but it has the potential to be even stronger, according to Ranjit Baxi of J&H Sales International (London), BIR Paper Division president, at that division’s meeting. Asian countries’ per capita paper consumption is significantly lower than that in North America and Europe, he noted. If per capita consumption were to double in India, it would still not approach Western levels, but it would result in 9 million more tons of volume, he said. With low consumption in China, Indonesia, and Vietnam as well, “demand is for sure moving east,” he concluded.
Looking at China, Baxi pointed out that the country’s imports were up in the first quarter of 2011 compared with the same period in 2010, and “the full year should be better” as well. He estimated China would import 26 million tons in 2011, 3.8 million more than in 2010, with the United States providing more of the increased volume than Europe.
In India, with printing and packaging demand growing at 14 percent annually and demand growth across all segments at 10 percent, the total paper industry size will double to 28 million mt by 2025, said guest speaker Jogarao Bhamidipati of ITC (Hyderabad, India), India’s largest paper company. Indian paper mills are dependent upon scrap due to the country’s lack of virgin fiber, but Bhamidipati questioned whether Western supply can continue to grow to meet Eastern demand. Collection rates of 60 percent to 70 percent might be the limit, he said. Further, importing recovered fiber has significant economic and environmental costs. The solution, Bhamidipati said, is for Asia to improve its domestic collections. India recovers only 2.2 million mt of the 10.3 million mt of paper and paperboard it consumes annually, with the remainder ending up in the landfill and getting contaminated, he said. ITC is investing heavily in developing both a recycling infrastructure and a recycling culture with its “Wealth out of Waste” program, which Bhamidipati described in depth. Its goal is a 70-percent recovery rate through source segregation, efficient collection, sorting, and recycling, he said.
Other Paper Division guest speakers addressed markets in Southeast Asia. Susanna Agus of Indah Kiat Pulp & Paper (Jakarta, Indonesia) described the growing fiber needs of Indonesia, one of the world’s most populous countries. The demand growth is coming primarily from containerboard mills, she said, which by 2012 will have the capacity to produce 4.4 million tons of test liner/medium annually. The country imported 2.47 million mt of recovered paper last year, most of which (1.5 million mt) was OCC, Agus said. Europe provides 51 percent of the imported material, followed by Singapore and Malaysia, which together provide 20 percent, and the United States and Canada, which together provide 11 percent. Indonesia is the “home market” for Singapore’s OCC and ONP, she pointed out, whereas freight costs from the United States make that country’s paper less competitive. Domestic collections can meet 55 percent of Indonesian mills’ paper needs, though single-stream collections and the challenges of moving material among the country’s many islands complicate those efforts, she said.
Singapore has achieved a 53-percent paper recycling rate, said Iris Tan of the Likok Group of Cos. (Singapore), up from 46 percent in 2004. Every bit of that recovered paper gets exported, she pointed out, because Singapore has no paper mills. Collections are done by door-to-door scrap peddlers, cleaning and waste management companies, recyclers, and government initiatives. The material is source-separated, and seven major companies, including her own, bale and export it.
In Europe, many countries are seeing exceptionally strong paper markets, according to country and regional reports presented at the division meeting. Jean-Luc Petithuguenin of Paprec Recyclage (Paris) highlighted how much the markets had changed in France since the depths of the recession. “In November 2008, it was impossible to sell even a ton of our product,” he said. “Twenty months later, we have the best prices we’ve seen in our life.” The 18-month run of high prices is unprecedented, he added. The first quarter of 2011 remained strong, though OCC prices fell somewhat in the spring, and some volumes could not find a destination. Petithuguenin forecast lower Asian prices and more adjustments in June, but “no collapse.”
Asian demand is driving the market in southern Europe, said Francisco Donoso of Reciclajes Dolaf (Madrid). The market is up 25 percent from last year, with prices the highest they’ve been “in 15 years, or ever,” he said. This is leading to strong competition for new sources of supply. The Czech Republic was seeing OCC prices up €25 to €30 a ton in the first quarter of 2011, with prices for other grades relatively stable, reported Jaroslav Dobes of Remat (Brno, Czech Republic). Greater export demand, a stagnation in collections, and seasonal collection declines have led to material shortages and high prices, he said, but the situation is “probably unsustainable” over the long term. Faring less well was Italy, which was seeing a slowdown in imports from Asia after a previous quarter of price increases, said Giuseppe Masotina of Masotina (Corsico, Italy). Prices were down by €5to €10 a ton, and he expected them to drop another €10 in June. With the country’s low stocks, he did not expect significant additional price decreases, he added. Further, he expected the downturn in prices to “give a breath of fresh air” to struggling packaging mills.
The European Recovered Paper Association (Brussels) has focused on three main issues recently, reported Merja Helander of Lassila & Tikanoja (Helsinki), ERPA’s president. Under the EU End of Waste framework, the industry is very close to having a definition for how and when recovered fiber will cease to be waste. ERPA also is nearly finished with a three-year process of revising the European list of standard grades for recovered paper and board. The industry needs the revisions to account for market changes in the past decade, Helander said, expressing a hope for a single, worldwide set of grade standards in the future. Finally, the association has been working on the third European Declaration on Paper Recycling, covering the years 2011 to 2015. Helander expects approval for the final text and recycling target in June for a launch this fall.
Plastics Committee Focuses on Asia
An overview of China’s plastics recycling market was one highlight of BIR’s Plastics Division meeting. China imports 75 percent of the world’s recovered plastic, with import volumes estimated at 9.4 million mt in 2010, though volumes are down slightly so far in 2011, said Candy Chen of Veolia Environmental Services Asia (Beijing), who presented the report. Much of the material originates in Europe and the United States and gets transshipped through Hong Kong, she said.
Half of the Chinese plastics market is LDPE, though that market is weak right now due to high stock levels, labor shortages, and China’s tighter monetary policy, she said. Buyers are less confident, and margins are smaller. The country recently approved its first four licenses for importing PET bottles, though with strict environmental controls on the importers, and end users have not been as enthusiastic as expected, she said. PET prices were up in early 2011, stable in March and April, and fell in May due to lower oil and bulk cargo prices. Once importers clear the environmental hurdles for importing PET, China is likely to allow imports of other preprocessed material, Chen said.
Looking at other grades, HDPE and PP demand is strong, but demand in Europe and the United States is keeping material from those regions out of China’s reach. Instead, it’s seeking those grades from South Asia, South and Central America, the Middle East, and Eastern Europe—a trend she expects to continue. Prices are rising rapidly for ABS, PC, and PS, and Chen predicted strong long-term markets for these grades. She was less optimistic about PVC, which is “not a very popular product in China.”
China’s recovered plastics industry is characterized by peddler collectors and about 10,000 small-scale reprocessing facilities, Chen said. Its recycling rate is just 25 percent, estimated to reach 30 percent in 2015, but further growth seems hindered by the lack of recycling infrastructure. The country plans to further develop the industry by imposing stricter environmental controls and eliminating the smallest processors, resulting in fewer, larger facilities.
Plastics Committee Chair Surendra Borad of Gemini Corp. (Antwerp, Belgium) said he looks forward to the day plastic scrap follows other scrap commodities through the End of Waste process. Once the European Union defines the conditions under which recovered plastic ceases to be waste, it will ease the trade of this material, he said, by removing some bans or notification requirements that currently exist. At the same time, he cautioned against export duties Europe is considering imposing on scrap, calling them “short-sighted.” Europe cannot grow its production capacity enough to consume all the steel, paper, and plastic it now exports, he said. Instead, for scrap plastics, he recommended more recycling. About half of the scrap plastic Europe generates each year—about 11 million mt—still gets disposed, he said.
Borad also condemned the trend of governments banning the production or distribution of single-use plastic bags, which occurred recently in Italy and Delhi, India. The move is depressing Indian demand and prices for scrap plastic, he said. India still has the mindset that scrap is waste, he pointed out, which makes importing material difficult. Lower demand from India and China might be why European secondary material prices have fallen at the same time prime material prices have nearly returned to pre-recession levels, Borad said.
Country reports from France and Spain were generally optimistic. Jacques Musa of Veolia Propreté (Nanterre, France) reported prices for secondary material that were even higher than prime prices, as well as shortages of secondary plastics. He expects a “bright future” for scrap plastic, he said, because recyclers are “offering quality products,” and converters are looking for secondary materials to save money and meet customer demand for “green” products. Spain also has seen strong local markets and high prices lately, even for postconsumer material, reported Marc Figueras of Peninplastic (Barcelona, Spain). Slowing down, however, are collections and exports, especially to Asia, where the weak dollar is making European plastics less competitive.
Guest speaker Kian Seah of Heng Hiap Industries (Johor Bahru, Malaysia) described how his company is integrating Malaysia’s scrap plastic supply chain to create standard plastic granulates and innovative products. The company uses an automated system for sorting, filling, and blending scrap plastics that can produce 30-mt batches for greater uniformity, he said. It customizes colors, even white, based on client demand. The company exports most of its material to Europe, the United States, Japan, Korea, and Australia.
Joe Pickard is ISRI’s chief economist and director of commodities. Rachel H. Pollack is editor of Scrap.
ISRI Officials Visit E-Scrap Recycler in Singapore
While in Singapore to attend the Bureau of International Recycling spring convention, ReMA Chair John Sacco of Sierra Recycling & Demolition (Bakersfield, Calif.), ReMA President Robin Wiener, and Scrap Editor Rachel H. Pollack toured the scrap electronics processing and precious metals recovery facility of Cimelia Resource Recovery. This zero-landfill operation, which occupies a 65,000-square-foot warehouse, processes 25,000 mt a year of end-of-life electronics.
Cimelia recovers metals, plastics, and glass from scrap electronics via fully automated mechanical separation, including dedicated equipment for cathode-ray-tube devices. In addition to its main shredder, the company operates seven mobile shredders for small products or to provide secure shredding and data destruction at customer sites. Only 40 percent of its material comes from within Singapore, says Venkatesha (Venky) Murthy, the company’s managing director. The remainder originates in North America, Europe, and elsewhere in Asia, with suppliers including major North American and European electronics manufacturers.
The seven-year-old company is a subsidiary of Enviro-Hub Holdings, a public company also based in Singapore. It’s the country’s first electronics processor to achieve ISO:9001, ISO:14001, and OSHAS:18001 certification, Venky says. Read more about Cimelia and similar facilities in Southeast Asia in the September/October issue of Scrap.
Optimism prevailed at BIR’s spring 2011 convention in Singapore, with speakers generally bullish on the major scrap commodities and very much focused on the future of the Asian markets.